Bombardier (TSE:BBD.B) manufacturers commercial aircraft and is expected to begin delivering its CSeries planes in 2013, competing in the narrow-body space and presenting investors with a longer-term growth opportunity, says Brian K. Langenberg, Principal and Founder at Langenberg & Company, LLC.
“Bombardier is a bet on the CSeries, plain and simple. The CSeries is a — call it bigger than a regional, smaller than a 737, new entrant in the narrow-body space. First deliveries are expected in 2013. We think that plane will be successful. As the CSeries goes into production, we anticipate higher sales, contribution margin and overhead leverage, lower R&D spend and a C$1 billion decline in capital spending. Those are all good things,” Langenberg said.
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Langenberg says the stock could triple in the price per share over the next three to five years depending on the success of the Cseries and industry and macroeconomic matters.
“This is a $4 stock that we see getting $7 over the next 12 to 18 months. Longer term, depending upon the degree of success of the plane, a regional jet recovery and everything else, this is a stock that, over three to five years, could get to a range of $10 to $17 per share,” Langenberg said.