Bombardier hits multi-year high as BofA upgrades stock to ‘Buy’

Bombardier surged on Wednesday, reaching its highest point since October 2018, after Bank of America analysts upgraded the stock to ‘buy’ from ‘underperform’.

The stock rose from $78.96 at the close on Tuesday to $90.62 by end of trading day on Wednesday – intraday gain of 14.7%.

“Bombardier (BBD.A:CA) has navigated its way through a turbulent turn-around,” according to BofA analyst Ronald Epstein. “Following the peak of post-covid BizJet demand, BizJet aviation activity remains above 2019 levels, which we see as supporting Bombardier’s near-term strategy.”

BofA analysts believe the Canadian aircraft manufacturer is well-positioned for growth due to sustained demand for business jets.

Bombardier’s focus on its existing customer base, aftermarket parts and maintenance sales, and disciplined use of capital creates potential upside for investors, according to Bank of America.

The bank significantly increased its price target on Bombardier to C$120 per share, a substantial jump from their prior target of C$52 per share.

The company also announced that it has priced its offering of $750m aggregate principal amount of new senior notes due June 1, 2032. The notes will carry a coupon of 7.000% per annum and will be sold at par.

The company added, the issuance of the new notes is expected to close on or about June 5.