Bombardier Inc. (TSE:BBD.B) Just Reported And Analysts Have Been Lifting Their Price Targets

Last week, you might have seen that Bombardier Inc. (TSE:BBD.B) released its yearly result to the market. The early response was not positive, with shares down 8.0% to CA$59.80 in the past week. It was an okay report, and revenues came in at US$6.9b, approximately in line with analyst estimates leading up to the results announcement. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Bombardier

Taking into account the latest results, the current consensus from Bombardier's 13 analysts is for revenues of US$7.75b in 2023, which would reflect a decent 12% increase on its sales over the past 12 months. Earnings are expected to improve, with Bombardier forecast to report a statutory profit of US$2.05 per share. In the lead-up to this report, the analysts had been modelling revenues of US$7.63b and earnings per share (EPS) of US$1.96 in 2023. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The consensus price target rose 5.8% to CA$74.93, suggesting that higher earnings estimates flow through to the stock's valuation as well. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Bombardier analyst has a price target of CA$96.39 per share, while the most pessimistic values it at CA$59.72. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. One thing stands out from these estimates, which is that Bombardier is forecast to grow faster in the future than it has in the past, with revenues expected to display 12% annualised growth until the end of 2023. If achieved, this would be a much better result than the 26% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 10.0% annually. So it looks like Bombardier is expected to grow at about the same rate as the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Bombardier's earnings potential next year. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Bombardier going out to 2025, and you can see them free on our platform here..

Before you take the next step you should know about the 1 warning sign for Bombardier that we have uncovered.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.