CIBC upgraded Bombardier Inc.(BBD-B:TSX) to a Neutral rating from Underperform

STA Research
by: STA Research

CIBC Capital Markets Upgraded  Bombardier Inc. to a  Neutral rating from Underperform, and raised the target to $1.80 from $1.70 on the company’s stock price.

Bombardier Inc Stock Analysis:

Based on the Bombardier Inc stock forecasts from 5 analysts, the average analyst target price for Bombardier Inc is CAD 2.11 over the next 12 months. Bombardier Inc’s average analyst rating is Buy . Stock Target Advisor’s own stock analysis of Bombardier Inc is Slightly Bearish, which is based on 3 positive signals and 7 negative signals. At the last closing, Bombardier Inc’s stock price was CAD 1.32Bombardier Inc’s stock price has changed by +6.45% over the past week, -10.20% over the past month and +41.94% over the last year.

What we like:

Underpriced compared to earnings

The stock is trading low compared to its peers on a price to earning basis and is in the top quartile. It may be underpriced but do check its financial performance to make sure there is no specific reason.

Positive free cash flow

The company had positive total free cash flow in the most recent four quarters.

Superior Earnings Growth

This stock has shown top quartile earnings growth in the previous 5 years compared to its sector.

What we don’t like:

Low market capitalization

This is among the smaller entities in its sectors with below median market capitalization. That may make it less stable in the long run unless it has a unique technology or market which can help it grow or get acquired in future.

Poor risk adjusted returns

This company is delivering below median risk adjusted returns in its peers. Even if it is outperforming on returns , the returns are unpredictable. Proceed with caution.

High volatility

The total returns for this company are volatile and above median for its sector over the past 5 years. Make sure you have the risk tolerance for investing in such stock.

Poor return on assets

The company management has delivered below median return on assets in the most recent 4 quarters compared to its peers.

Negative cashflow

The company had negative total cash flow in the most recent four quarters.

Overpriced on free cash flow basis

The stock is trading high compared to its peers on a price to free cash flow basis. It is priced above the median for its sectors. Proceed with caution if you are considering to buy.

Low Revenue Growth

This stock has shown below median revenue growth in the previous 5 years compared to its sector

 

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