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 considers 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 points to upside potential relative to the current share price, the intermediary judges.

The only downside is that BofA is a little more circumspect about the Montreal-based group's desire to make acquisitions in the parts and defense markets, considered to be priority areas.

Recalling that recent deals in this sector have often been made on the basis of generous premiums, the analyst fears that Bombardier may 'overpay' for acquisitions or take on too much debt, thereby compromising its ability to improve earnings and distribute cash to shareholders.

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