Shares of Bombardier Inc. (TSE:BBD.B) have clawed back by more than 10% since hitting its September 2017 lows
SmallCapPower | October 11, 2017: Bombardier Inc. (TSX:BBD.B) shares have been hit by heavy turbulence from U.S. lawmakers recently, but could the worst be over for the Canadian transportation maker’s stock price?
The U.S. Commerce Department announced last week that it will be adding 79.82% to 219.63% in preliminary countervailing tariffs it said it would be imposing the week before, once deliveries to Delta Air Lines begin next year.
After dipping below $2 a share on September 27, 2017, Bombardier stock has reached $2.30 in early Wednesday trading.
Bombardier attempted to shift attention to its other aircraft on Sunday, by debuting the Global 7000, the largest jet ever designed for corporate use.
High-end business jets have always been the most important and most profitable part of Bombardier’s jet business. The Global 7000 is expected to add US$300 million to operating profit and contribute nearly one-third of Bombardier’s targeted US$10 billion in business jet revenues in 2020. This high-end aircraft will definitely play a key role in the five-year turnaround plan of Bombardier.
With eight customer jets in production and about 900 hours logged in its flight test program, the Global 7000 is on track for deliveries in late 2018. Bombardier said that it had a healthy order book for the Global 7000 and the aircraft was sold out until 2021.The expected list price is approximately US$73 million.
The Global 7000 will be on display at the National Business Aviation Association’s flagship industry trade show in Las Vegas on October 10th to 12th.
This debut of the Global 7000 will likely help boost Bombardier’s shares, which have declined during the past month. Bombardier currently trades at a forward PE of 27.63x and EV/EBITDA of 27.69x.
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