Key Morningstar Metrics for Bombardier
- : C$266.00Fair Value Estimate
- : ★★★Morningstar Rating
- : NarrowMorningstar Economic Moat Rating
- : HighMorningstar Uncertainty Rating
What We Thought of Bombardier’s Earnings
In a seasonally slow quarter for deliveries, Bombardier BBD.B reported flattish revenue of USD 1.6 billion and operating earnings of USD 167 million. Aftermarket services grew 25% year over year, to USD 617 million, and customer advances boosted cash flow by more than USD 1 billion in the quarter.
Why it matters: Bombardier has explicitly set out to expand its aftermarket services capabilities, thereby increasing its participation in the long-lived aftermarket for its jets. With a series of investments and increasing usage of business jets, the strategy seems to be working.
- During the first quarter, Bombardier delivered 14 Challenger and 10 Global jets, just one more, in total, than a year ago. Management cited some supply chain snags that delayed a few planes from being delivered before April.
The bottom line: We raise our fair value estimate for narrow-moat Bombardier to C$266 per share from C$263, primarily reflecting the time value of money.
- Investors sent the shares up more than 10% in intraday trading on April 30, bringing them within a few percentage points of our revised fair value estimates.
