(CercleFinance.com) – Bank of America announced on Wednesday that it had raised its recommendation on Bombardier shares from ‘underperform’ to ‘buy’ with a price target raised from 52 to 120 Canadian dollars.
In a research note, the analyst believes that after a complicated turnaround, the aircraft manufacturer is now fully focused on exploiting its installed base and growing its replacement parts business.
Accompanied by a disciplined allocation of its capital, this combination of elements reveals an upward potential in relation to the current stock price, judges the intermediary.
The only downside is that BofA is a little more cautious about the Montreal group’s desire to make acquisitions in the parts and defense markets, considered priority areas.
Recalling that the latest operations within the sector have often been carried out on the basis of generous bonuses, the analyst fears that Bombardier will ‘overpay’ for its buyouts or that it will take on debt at too high levels, thus compromising its capacity improve its profits and distribute cash to its shareholders.
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