Bombardier: Buy As Deleveraging Turns Into Value Creation

Dhierin Bechai Investing Group Leader Follow Summary Bombardier maintains a buy rating, driven by robust Q2 results and improved financial flexibility. Q2 saw revenue up 6% to $2.15B, adjusted EBITDA up 9%, and free cash flow of $228M despite lower deliveries, with backlog rising to $21.8B. BDRAF’s balance sheet strength enables investments in output, Services, Defense, and potential M&A, while net leverage declined to 1.6x. Key risks are Q4 delivery concentration and supply chain constraints, but margin, leverage, and liquidity improvements support a $285.22 price target with 19% upside. Looking for more investing ideas like this one? Get them exclusively at The Aerospace Forum. Learn More » Michael Derrer Fuchs/iStock Editorial via Getty Images Earlier this year, I maintained my buy rating on Bombardier shares ( BDRAF , BDRBF , BBD.B:CA ) as the company continued to expand its Services footprint, improve aircraft economics and convert stronger This article was written by Dhierin Bechai 24.4K Followers Follow Dhierin-Perkash Bechai is an aerospace, defense and airline analyst. Dhierin runs the investing group The Aerospace Forum, whose goal is to discover investment opportunities in the aerospace, defense and airline industry. With a background in aerospace engineering, he provides analysis of a complex industry with significant growth prospects, and offers context to developments as they occur, describing how they might affect investment theses. His investing ideas are driven by data informed analysis. The investing group also provides direct access to data analytics monitors. Learn more. Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.