After Struggling in 2023, These 2 Stocks Could Make a Big Comeback in 2024

Two stocks are well-positioned to stage a strong rebound in 2024 after a challenging last year.

| More on:
Going against the grain

Image source: Getty Images

People invest in stocks for higher returns or larger payouts later. Unfortunately, the warning that past performance is not a reliable indicator of future performance is valid because volatility is ever-present. Stocks outperform or underperform depending on the impact of market forces on sectors and companies.

For example, Bombardier (TSX:BBD.B) and ATS Corporation (TSX:ATS) rewarded investors with hefty gains in the last three years but have struggled for most of 2023. However, both stocks could make a big comeback this year as tailwinds develop. You can include them in your buy lists this March.

Strong position

Bombardier takes pride in being the leading manufacturer of fine business jets. The two aircraft families of this $4.9 billion Canadian firm, Challenger and Global, are the most comprehensive in the industry today. The BBD stock price rose to as high as $73.78 on March 31, 2023, followed by spikes and dips the rest of the year.

At $49.91 per share (-6.20% year-to-date), Bombardier’s trailing one-year price return is 27.7%, while the overall return in 3 years is 232.7%. Based on market analysts’ 12-month average and high price targets, the stock’s upside potential is between 51.5% ($75.64) and 100.4% ($100.02).

The aircraft manufacturer incurred a net loss of $128 million in 2022 but made a turnaround in 2023. In the 12 months ending December 31, 2023, revenues grew 16% year-over-year to $8 billion, while net income reached $490 million. Notably, the order backlog at year-end was $14 billion.

Bombardier’s President and CEO, Eric Martel, said the company had solid financial performance last year after building on its momentum from the two previous years. He adds the company started 2024 in a strong position too. Bombardier’s refreshed portfolio consisted of medium and large business jets. They sold well because it aligned with market demand.

This year, the aircraft delivery guidance is 150 to 155 units from 138 in 2023. Management forecasts revenue growth of 5% to 7.5%, or $8.4 to $8.6 billion, and projects free cash flow from $100 to $400 million.  

Strong fundamentals

ATS Corporation provides end-to-end automation solutions. The $5 billion company from Cambridge, Canada, caters to various industries, including consumer products, food and beverage, energy, life sciences, and transportation. ATS’ reach is global, and it operates in more than 20 countries.

Besides the 65-plus manufacturing facilities, it has over 85 offices in North America, Europe, Asia, and Oceania. Moreover, the strong business fundamentals stem from focusing on large, attractive end markets. Management adds that mergers and acquisitions (M&As) remain a key growth driver.  

In Q3 fiscal 2024, revenues and net income rose 16.2% and 61.6% respectively to $752 million and $47.2 million versus Q3 fiscal year 2023. On a year-to-date basis (nine months ending December 31, 2023), the top and bottom lines increased 21.4% and 48.5% year-over-year to $2.2 billion and $145.7 million.

Market analysts are bullish. Their 12-month high price target is $73, or 43.3% higher than the current share price of $50.93. ATS’ total return in 3 years is 79.5%, a compound annual growth rate of 21.5%.

Potential winners

Bombardier and ATS endured massive headwinds last year but are well-positioned to return to the winners’ circle in 2024.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool recommends ATS Corp. The Motley Fool has a disclosure policy.

More on Investing

Tech Stocks

3 Magnificent Stocks That Have Created Many Millionaires, and Will Continue to Make More

Shopify stock is an example of a millionaire-maker stock that is likely to continue to thrive in the long run.

Read more »

Couple relaxing on a beach in front of a sunset

3 Stocks to Buy Now That Could Help You Retire a Millionaire

These three Canadian stocks are highly reliable and have tremendous long-term growth potential, making them some of the best to…

Read more »

hand using ATM
Dividend Stocks

Should Bank of Nova Scotia or Enbridge Stock Be on Your Buy List Today?

These TSX dividend stocks trade way below their 2022 highs. Is one now undervalued?

Read more »

A data center engineer works on a laptop at a server farm.
Tech Stocks

Why Hut 8 Stock is Up 44% in the Last Week

Hut 8 stock (TSX:HUT) has surged in the last week, and even more year to date. But if you think…

Read more »

Coworkers standing near a wall
Tech Stocks

Why Nvidia Stock Fell 10% Last Week

Nvidia stock (NASDAQ:NVDA) fell by 10% last week after its competitor announced an earnings date, but without preliminary results.

Read more »

A meter measures energy use.
Dividend Stocks

Here’s Why Canadian Utilities Is a No-Brainer Dividend Stock

Canadian Utilities stock is down 23% in the last year. Even if it wasn’t down, it is a dividend stock…

Read more »

edit Business accounting concept, Business man using calculator with computer laptop, budget and loan paper in office.
Dividend Stocks

Got $5,000? Buy and Hold These 3 Value Stocks for Years

These essential and valuable value stocks are the perfect addition to any portfolio, especially if you have $5,000 you want…

Read more »

Growing plant shoots on coins
Dividend Stocks

3 Magnificent Ultra-High-Yield Dividend Stocks That Are Screaming Buys in April

High yield stocks like BCE (TSX:BCE) can add a lot of income to your portfolio.

Read more »