2024-02-09 23:44:13
Bank of America expects Disney+ to add between 5.5 million and 6 million subscribers in 2024. (Photo: 123RF)
What to do with Bombardier, Disney and BCE stocks? Here are some analyst recommendations likely to move prices soon. Note: the author may have a completely different opinion than that expressed by the analysts.
Bombardier (BBD.B, $45.40): disappointing cash flow forecast
Bombardier’s cash flow forecast for fiscal year 2024 is somewhat disappointing, judges National Bank Financial.
During the conference call to present the results for the fourth quarter of 2023, management indicated that it expected cash flow to range between $100 million and $400 million. This is a forecast below that of the National Bank ($475 million) and the market consensus ($552 million), underlines analyst Cameron Doerksen.
The difference will mainly come from additional capital investment to accelerate deliveries in 2024, particularly that of mid-size Challenger aircraft, adds the analyst. Management expects an investment that will vary between $200 million and $500 million, while the National Bank rather anticipated an amount of less than $200 million for the 2024 fiscal year.
On the other hand, he notes, the company is still targeting a cash flow of $900 million for 2025, a goal that is still achievable in the eyes of the National Bank.
Bombardier’s forecasts for 2024 in terms of revenues and earnings before interest, taxes, depreciation and amortization (EBITDA), however, are viewed more positively by Cameron Doerksen. The company expects revenues between $8.4 billion and $8.6 billion, which is above the National Bank’s estimate of $8.1 billion but which is explained by the plan acceleration of aircraft delivery.
EBITDA is forecast in a range of $1.3 billion to $1.35 billion, which is in line with what the financial institution was already forecasting.
The analyst notes, however, that the current valuation of the stock seems to reflect investors’ opinion that the company risks not achieving its targets in 2025, even if the order book provides visibility regarding revenues and growth. cash flow and that market conditions generally remain favorable.
National Bank maintains its forecast of outperformance of Bombardier shares compared to its sector of activity as well as its target price of $94.
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