Bombardier (BDRBF) (TSE:BBD.B), the aircraft and train manufacturer, has been having a pretty good run of late, and it’s actually getting better. While an upcoming court case should have soured sentiment, the company’s plans are turning things around. Bombardier shares were up modestly in Tuesday morning’s trading as a result.
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A class action lawsuit landed on Bombardier’s doorstep, and it’s ready to fight back. The suit in question, which will take place in the Superior Court of Quebec, focuses on the firm’s recent restricted share unit (RSU) plan, and Bombardier, for its part, denies any wrongdoing.
The suit notes that Bombardier launched a series of RSUs in November 2020, with a planned vesting date of November 2023. But, when Bombardier sold off its transportation business, it canceled some of the RSUs based on the value of the transportation business. Investors cried foul, and the suit began. However, the court authorized just two out of seven causes of action involved, which suggests that much of the suit was fundamentally weak to begin with.
Custom Solutions and Expanded Support
Bombardier has long been working to produce highly adaptable aircraft that can be modified to match ground needs, and its Challenger and Global aircraft have definitely fit that bill in the past. In fact, the company recently announced that it will be the U.S. Army’s pick for the High Accuracy Detection and Exploitation System (HADES).
Bombardier is also dedicated to support and recently expanded its support network, adding a line maintenance station to the heavy maintenance operation at Biggin Hill. The line maintenance station—the ninth such station so far worldwide—is located at Farnborough Airport and will offer new support options throughout Europe. That should help improve Bombardier’s global reputation for quality and responsiveness of service.
Is Bombardier Stock a Good Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on Bombardier stock based on 10 Buys and one Hold assigned in the past three months, as indicated by the graphic below. After a 70.98% rally in its share price over the past year, the average Bombardier price target of C$117.91 per share implies 18.64% upside potential.
