Bombardier (BBD.B) AI Stock Analysis

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Bombardier

(TSX:BBD.B)

64Neutral

Bombardier's stock score reflects its robust revenue growth and improved margins, offset by high leverage and financial instability. Technical indicators suggest bearish sentiment, and valuation appears fair. The earnings call highlighted strong achievements but also noted risks from potential tariffs and supply chain issues.

Positive Factors

Earnings and Financial Performance

Improving end market demand, cost restructuring, and lowered interest costs will support significant improvement in earnings and cash flow over the coming years.

Market Demand

Business jet demand fundamentals appear to be on solid footing, with strong flight activities and declining inventories of used aircraft.

Supply Chain Stability

Management noted that supply chains are stable and should support 150+ deliveries in 2025.

Negative Factors

Supply Chain Challenges

Supply chain remains challenged, particularly in terms of engine deliveries.

Tariff Risk

Tariff-related uncertainties may create disruptions in orders in the near term.

Bombardier (BBD.B) vs. S&P 500 (SPY)

Market Cap

$7.98B

Dividend YieldN/A

Average Volume (3M)625.26K

Price to Earnings (P/E)17.2

Beta (1Y)1.64

Revenue Growth9.57%

EPS Growth-27.38%

CountryCA

Employees17,900

SectorIndustrials

Sector Strength70

IndustryAerospace & Defense

Share Statistics

EPS (TTM)4.72

Shares Outstanding86,072,685

10 Day Avg. Volume782,822

30 Day Avg. Volume625,257

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.67

Price to Cash Flow (P/CF)1.70

P/FCF Ratio1.30

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

C$112.96

Price Target Upside39.25% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering9

Bombardier Business Overview & Revenue Model

Company DescriptionBombardier Inc. engages in the manufacture and sale of business aircraft in Europe, North America, the Asia Pacific, and internationally. It provides new aircraft, specialized aircraft solutions, and pre-owned aircraft. The company also offers aftermarket services, including parts, smart services, service centers, training, and technical publications. It serves multinational corporations, charter and fractional ownership providers, governments, and private individuals. The company was incorporated in 1902 and is headquartered in Dorval, Canada.

How the Company Makes MoneyBombardier generates revenue primarily through the sale of its business jets, which are known for their innovation, performance, and reliability. The company's key revenue streams include new aircraft sales, which account for a significant portion of its income, as well as aftermarket services such as maintenance, repair, overhaul, and parts sales. Bombardier also benefits from long-term service agreements with customers, ensuring a sustainable revenue flow. Partnerships with suppliers and strategic alliances further enhance its market position and contribute to its financial success. Additionally, Bombardier's global presence and strong brand reputation enable it to capture a sizable share of the business aviation market.

Bombardier Financial Statement Overview

Summary

Bombardier has shown a strong revenue recovery and improved gross margins. However, its financial stability is concerning due to high leverage and negative equity. Cash flow generation is adequate but declining, suggesting the need for improved operational efficiencies and reduced financial liabilities.

Income Statement

Positive

Bombardier has shown a strong recovery in revenue, growing from $6.085 billion in 2021 to $8.665 billion in 2024, with a recent annual growth rate of 7.69%. The gross profit margin improved significantly to 20.6% in 2024, indicating better cost management. However, EBIT has dropped to $0 in 2024, and the net profit margin decreased to 4.27% from 5.53% in 2023, pointing to challenges in operating efficiency.

Balance Sheet

Neutral

The balance sheet reflects high leverage, with a negative stockholders' equity of -$1.991 billion in 2024, suggesting financial instability. The debt-to-equity ratio is not calculable due to negative equity, highlighting significant financial risk. However, total debt has been reduced over the years, showing some efforts towards financial restructuring.

Cash Flow

Positive

Operating cash flow has been positive, but it decreased from $623 million in 2023 to $405 million in 2024. Free cash flow also declined slightly to $232 million in 2024, indicating potential liquidity challenges. The operating cash flow to net income ratio is 1.10, suggesting reasonable cash generation relative to net income.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
8.66B	8.05B	6.91B	6.08B	6.49B
	Gross Profit
1.78B	1.63B	1.26B	924.00M	516.00M
	EBIT
0.00	786.00M	307.00M	218.00M	-423.00M
	EBITDA
1.17B	933.00M	722.00M	635.00M	87.00M
	Net Income Common Stockholders
370.00M	445.00M	-128.00M	-249.00M	-170.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.68B	1.69B	1.76B	1.75B	2.68B
	Total Assets
12.67B	12.46B	12.32B	12.76B	23.09B
	Total Debt
5.54B	5.61B	5.98B	7.05B	10.07B
	Net Debt
3.89B	4.01B	4.69B	5.37B	7.63B
	Total Liabilities
14.66B	14.86B	15.09B	15.85B	29.75B
	Stockholders Equity
-1.99B	-2.40B	-2.76B	-3.09B	-9.32B
Cash Flow		Free Cash Flow
232.00M	257.00M	717.00M	95.00M	-3.19B
	Operating Cash Flow
405.00M	623.00M	1.07B	332.00M	-2.82B
	Investing Cash Flow
-164.00M	118.00M	-304.00M	-89.00M	967.00M
	Financing Cash Flow
-203.00M	-438.00M	-1.13B	-3.21B	1.71B

Bombardier Technical Analysis

Technical Analysis Sentiment

Negative

Last Price81.12

Price Trends

50DMA

83.31

Negative

100DMA

89.89

Negative

200DMA

92.50

Negative

Market Momentum

MACD

-1.21

Positive

RSI

48.62

Neutral

STOCH

52.39

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:BBD.B, the sentiment is Negative. The current price of 81.12 is below the 20-day moving average (MA) of 82.39, below the 50-day MA of 83.31, and below the 200-day MA of 92.50, indicating a bearish trend. The MACD of -1.21 indicates Positive momentum. The RSI at 48.62 is Neutral, neither overbought nor oversold. The STOCH value of 52.39 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:BBD.B.

Bombardier Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DRX	82 Outperform	C$152.27M	2.88	34.27%	0.57%	19.21%	105.30%
FTG	75 Outperform	C$200.88M	14.89	17.82%	―	15.25%	48.96%
HRX	74 Outperform	$1.09B	20.96	8.91%	―	19.98%	217.02%
MAL	68 Neutral	C$673.66M	18.99	4.63%	0.85%	7.13%	285.41%
BBD.B	64 Neutral	$7.98B	17.20	-18.58%	―	9.57%	-27.38%
Sector *	62 Neutral	$7.70B	13.14	3.53%	3.32%	3.90%	-14.25%

* Industrials Sector Average

Performance Comparison

TSE:BBD.B

Bombardier

84.35

27.40

48.11%

CAE

23.11

3.98

20.81%

TSE:DRX

ADF Group Inc. SV

5.34

-7.33

-57.85%

TSE:FTG

Firan Tech

7.98

2.67

50.28%

TSE:HRX

Heroux-Devtek

32.48

13.22

68.64%

TSE:MAL

Magellan Aerospace

12.18

4.19

52.44%

Bombardier Earnings Call Summary

Earnings Call Date: Feb 6, 2025 | % Change Since: -4.24% | Next Earnings Date: May 1, 2025

Earnings Call Sentiment Neutral

The earnings call reflects a strong performance by Bombardier in 2024, with significant achievements in service revenue, financial metrics, and product performance. However, the uncertainty surrounding potential tariffs from the U.S. and ongoing supply chain issues present challenges moving forward.

Highlights

Record Service Revenue Achievement

Bombardier achieved $2 billion in service revenue in 2024, a full year ahead of schedule, doubling a high-margin business organically in less than five years.

Improved Financial Metrics

Adjusted EBITDA margin increased to 15.7% in 2024, with a significant 11% year-over-year increase in adjusted EBITDA, and a 31% increase in adjusted net income.

Leverage Ratio and Credit Rating Improvement

Net leverage improved to 2.9x, reaching the 2025 target a year early, with credit rating upgrades from both Moody's and S&P Global Ratings.

Product Performance and Market Leadership

The Global 7500 set multiple speed records, and the Challenger 3500 became the fastest platform to reach 100 deliveries in its class.

Robust Backlog and Order Activity

Backlog increased to $14.4 billion, with a book-to-bill ratio of 1 in 2024, reflecting strong demand for products and services.

Lowlights

Tariff Uncertainty

Potential tariffs from the U.S. pose a significant risk, causing the company to withhold guidance for 2025 despite a strong performance record.

Supply Chain Pressures

Ongoing supply chain challenges created over 50 basis points of drag on EBITDA margins for the year and missed deliveries in 2024.

Company Guidance

During the Bombardier earnings call for the fiscal year 2024, the company refrained from providing guidance for 2025 due to the uncertainty surrounding potential tariffs. Despite this, Bombardier highlighted its achievements in 2024, including reaching $2 billion in service revenue a year ahead of schedule and achieving an adjusted EBITDA margin of 15.7%. The company also reported a backlog increase to $14.4 billion, a 1x book-to-bill ratio, and a net leverage ratio of 2.9x, surpassing its 2025 target. While supply chain challenges persisted, causing a 50 basis point drag on margins, Bombardier managed to grow its total revenue to $8.7 billion, an 8% increase from the previous year. The company also noted a 48% reduction in gross debt since 2020, reflecting its focus on financial resilience. Despite the tariff uncertainty, Bombardier remains optimistic about the strong demand for its aircraft, favorable market conditions, and its ability to manage potential disruptions with contingency plans.

Bombardier Corporate Events

Business Operations and StrategyFinancial Disclosures

Bombardier Achieves Fourth Year of Growth with Strong 2024 Results

Positive

Feb 6, 2025

Bombardier has posted its fourth consecutive year of growth and solid financial performance, with revenues reaching $8.7 billion and a record service performance of over $2 billion. The company delivered 146 aircraft and achieved a significant adjusted EBITDA increase of 11% to $1.36 billion. Despite achieving a net leverage ratio of 2.9x and strong operational metrics, Bombardier has decided to defer providing 2025 guidance due to new tariff-related uncertainties stemming from recent U.S. executive orders.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.