Bombardier: US tariffs could bend or delay more …

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Bombardier: US tariffs could bend or delay more …

Key Morningstar Metrics for Bombardier

What we thought about Bombardier’s earnings

The Trump administration has ordered 25% duty on US imports from Canada. By Bombardiers Bbd.a $ 8 billion in 2023 revenue, USD 5 billion came from US-based customers, putting the majority at some risk of delay or reduction.

Big picture: As we wrote in November, Tariff’s on Imports highlighted in the 2024 Republican party platform, framed as a political tool to promote fair and mutual trade. Although we cannot rule out a long -term trade war, we see customs duty as a negotiating tactic.

  • Of the approx. 140 business rays delivered by Bombardier in 2023 were 112 powered by engines made by Honeywell in Arizona or GE Aerospace in Indiana. These engines represent more than a third of the value of the jet in some cases, which potentially complicates the effects of the tariffs.
  • Both the US Army and Air Force buy Bombardier Jets modified for electronic surveillance and Battlefield Communications. They can seek an exception from paying the 25% duty or its removal.

The bottom line: We have not changed our forecast or fair value estimate of C $ 101 per day. Stock. We will monitor US-Canadian trade policy developments with a view to how quickly negotiations to reduce customs.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.