However, I am confident that there will not be any problems converting this backlog into actual deliveries. The current outstanding amount of orders is $14.8 billion, which is almost 40% higher than the level seen in 2020. With an increased backlog of 1.5x book to bill ratio in 2022 due to higher deliveries following strong demand, I believe management can reach its segment-wise goal of $7 billion of OE revenue in 2025. The new goals call for at least $9 billion in revenue (an increase of 8% over the consensus original FY25 estimates), an EBITDA margin of 18% (equivalent to $1.62 billion in EBITDA), and free cash flow of at least $900 million. The most notable change is the increase in management's 2025 goals, which were first presented at an investor day in March 2021 and were reaffirmed at an investor day in March 2022. I recommend a buy rating with the confidence that management can hit FY25 targets and the market would at least value the stock at its historical average (10x EBITDA). All of these could be used to argue that Bombardier should trade at a premium to history. The last two years have seen a marked improvement in the end market, an expansion of the backlog, the capture of aftermarket share, the realization of cost savings, the expansion of margins, the generation of substantial cash flow, and the improvement in the health of the balance sheet for Bombardier. With an expected EBITDA of $1.6 billion for FY25, the stock will be trading at a multiple of 7x EBITDA, which is close to its low point since 2016. Whenever I consider investing in Bombardier, I always ask myself how much the company is worth if it achieves its FY25 targets. The fact that those goals are also significantly higher than market expectations is the call's most notable takeaway, especially given how little was said about them by management in the 4Q22 earnings. Following recent growth in both its own operating performance and the broader business jet market, Bombardier held an investor day last week during which it provided an optimistic update on the company and substantially raised 2025 targets. It's primary business is the development, production, and maintenance of business jets for use by public and private organizations worldwide. Its jets include Challenger 300, Challenger 350, Challenger 3500, Global 5000, Global 5500, Global 6000.Frankpeters/iStock via Getty Images Descriptionīombardier ( OTCQX:BDRBF) makes private jets. The Company's robust customer support network services the Learjet, Challenger, and Global families of aircraft, and includes facilities in strategic locations in the United States and Canada, as well as in the United Kingdom, Germany, France, Switzerland, Italy, Austria, The United Arab Emirates, Singapore, China and Australia. The Company also provides aftermarket support for both of these aircraft, as well as for the Learjet family of aircraft. The Company designs, develops, manufactures and markets two families of business jets (Challenger and Global), spanning from the mid-size to large categories. The Company has a fleet of approximately 5,000 aircraft in service with a wide variety of multinational corporations, charter and fractional ownership providers, governments, and private individuals. is focused on designing, manufacturing, and servicing business jets.
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