Q: What would your views be on Bombardier at the moment? Buy, sell, hold? What kind of growth do you expect it might have over the next couple of years? 10%? 15%? Thank you so much in advance for any opinion you can share!
5i Research Answer:
BBD.B has had a nice turnaround from its COVID lows over the last year with the stock more than doubling. While we would not expect this type of growth in the future, its fundamentals have been improving and it is still decently cheap at 13x forward earnings. Analysts are viewing it very favourably in the aerospace and defense industry with strong EPS expansion expected. Our issue here is the very high debt load and weak history of generating value for shareholders. We think it is a hold right now and returns in the 10%-15% are plausible.