Bombardier Inc. rose the most in seven weeks amid optimism that new Chief Executive Officer Alain Bellemare and his lieutenants will deliver on a plan to boost earnings at the struggling plane- and trainmaker in the next five years.
“People like the management,” David Tyerman, a Canaccord Genuity analyst, said in a telephone interview Wednesday. “This management team gives a ton more information than the previous team. At least we have an idea of where we are going.”
The stock rally followed an investor presentation that was the first since Bombardier secured $2.5 billion in investments from the government of Quebec and the province’s public pension fund manager. Including Bellemare, six of the eight senior leaders who appeared Tuesday weren’t with the company when the year began.
Bombardier’s widely traded Class B shares climbed 12 percent, the most since Oct. 6, to C$1.32 at the close in Toronto on volume that was more than twice the trailing 12-month daily average. That pared the year-to-date decline to 68 percent, which is still the most among Canadian industrial companies.
Tuesday’s meeting included presentations by Chief Financial Officer John Di Bert -- who said the company needed to show improved performance, not just offer promises -- and Bombardier Commercial Aircraft President Fred Cromer, who suggested the jetmaker is focused on finding higher-profile C Series buyers to add prestige to a customer list now tilted toward smaller carriers and lessors.
Investors "say forward risk associated with liquidity is now pretty much off the table," Nicholas Heymann, a William Blair & Co. analyst, said by telephone from New York. Bombardier has "managed to complete the de-risking phase," he said.
Pension-fund manager Caisse de Depot et Placement du Quebec agreed last week to take a 30 percent stake in Bombardier’s rail business for $1.5 billion, boosting the division that Bellemare had explored taking public. The accord came after Quebec’s government said on Oct. 29 that it would invest $1 billion to prop up the C Series program.