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Fly News Breaks for January 17, 2020
BDRBF, TXT
Jan 17, 2020 | 08:10 EDT
Jefferies analyst Sheila Kahyaoglu noted that Textron (TXT) has a modest net debt position and "one potential lever" would be consolidating the business jets assets of Bombardier (BDRBF), which just saw its shares selloff sharply following a negative pre-announcement. Based on the 2021 consensus sales forecast for Bombardier Business Aircraft, a deal could be 22% accretive assuming an EV/Sales multiple of 1.0 times, according to Kahyaoglu. Separately, the analyst believes Textron's 2020 EPS guidance is likely to come in below consensus expectations, but this has the potential to serve as a "clearing of the decks." Kahyaoglu, who likes Textron's potential in Defense and in terms of possible M&A, keeps a Buy rating on the shares.
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