Bombardier's Results Impress the Street

An impressive first quarter result this week from Bombardier Inc. (BDRAD.PK) led several analysts to increase their earnings estimates for the Montreal manufacturer on Thursday.

Chris Murray, CIBC World Markets analyst, increased his price target to C$11 a share from C$9 after increasing his earnings per share estimate for the current fiscal year to C$0.51 a share, from C$0.40, and for next year to C$0.68 a share from his previous estimate of C$0.58.  He maintained his “sector outperformer” rating on the stock.

In a note to clients Thursday he said:

With additional catalysts such as the CSeries program on the horizon, strong liquidity and the continuing capability to grow earnings we believe there still remains opportunities for the company and shareholders considering an investment.

He added that if the CSeries is launched, it could add C$1.15 to his price target.

Benoit Poirier, Desjardins Securities analyst, who raised his target on Thursday to C$10 a share from C$8.55, said he agrees that there are plenty of opportunities on the horizon, but that it was the aerospace division’s improved margins that led to his increase. He said he now expects the aircraft divisions EBIT margin to hit 9.4% by next year, and possibly between 11% and 12% in the long term, noting that rivals Gulfstream (GIA) and Cessna reported margins of over 16% in the first quarter.

Fadi Chamoun, UBS analyst, increased his target to C$10.50, from C$8.75, primarily on the company’s strong free cash flow position and his new earnings estimates. He said he now expects earnings per share of C$0.54 this fiscal year, up C$0.49, and C$0.66 a share next year, up from C$0.60.

Finally, RBC Capital Markets analyst Nick Morton increased his target to C$11 a share from C$8.50, after increasing his EPS forecast for this year to C$0.50 a share, from C$0.41, and to C$0.60 a share from C$0.49 next year.