Analyst Ratings Changes
On March 22nd, 2023, JP Morgan(Rank#4) raised its target price on Bombardier’s stock from $72 to $75. JP Morgan also maintained its “Underperform/Sell” rating on the Canadian multinational aerospace and transportation company.
This update comes after Bombardier released its Q4 and full-year 2022 financial results earlier this month, reporting a net loss of $638 million for the year. While the company’s revenue increased by 13% year-over-year, JP Morgan analysts remain cautious about its prospects.
Despite the target price increase, JP Morgan’s “Underperform” rating suggests that they still believe that Bombardier’s stock is likely to perform worse than its peers in the industry. This could be due to several factors, such as the company’s ongoing financial challenges, including its high debt load and ongoing legal disputes, as well as its recent stock valuation, which is overvalued on a long term basis.
Bombardier has been working to improve its financial position, selling off non-core assets and streamlining its operations. In February 2023, the company announced that it had reached an agreement to sell its rail business to French multinational company Alstom for $7.6 billion. This move is expected to reduce Bombardier’s debt and allow it to focus on its remaining aerospace business.
JP Morgan’s “Underperform” rating suggests that the sale of its rail business may not be enough to turn things around for the company. The financial institution may be concerned about the ongoing legal dispute between Bombardier and Mitsubishi Heavy Industries over alleged theft of trade secrets related to aircraft wing technology.
It is worth noting that JP Morgan is not the only financial institution to express caution about Bombardier’s prospects. In January 2023, Credit Suisse downgraded Bombardier’s stock from “neutral” to “underperform” and lowered its target price from $70 to $60.
JP Morgan has raised its target price on Bombardier’s stock, its underperform rating suggests that it remains cautious about the company’s prospects. Bombardier’s ongoing financial challenges and legal disputes may continue to weigh on the company’s performance, making it a risky investment compared to its peers in the industry. Investors should carefully consider the risks before making any decisions regarding Bombardier’s stock.