The shares opened down in early Monday trading, but were unchanged at
In a report, he said a 50 per cent discount to its aerospace peers is once again appropriate.
"The latest program setback aggravates the concerns we had with the slow flight test program to date and calls into question development progress," he wrote. "Clearly, the engine failure will add to anticipated program timing and costs, while likely halting recent new order campaigns."
The engine has been sent to manufacturer
A company spokesman said there were no injuries and testing will resume pending an investigation by
Analysts fear the latest setback will further slow the test program and increase costs for the CSeries jets. Bombardier has insisted the CSeries remains on track to be delivered in the second half of 2015.
The "worst-case scenario" would be if the engine malfunction was deemed a structural issue.
He said anything but the best-case scenario will see investors flee Bombardier's stock as anxiety mounts over the CSeries' progress.
"The company's investors are not in the mood to give Bombardier the benefit of the doubt at this juncture of the story," Chiang wrote, adding that it was impossible to handicap which outcome is most likely.
"We anticipate further updates through the week, although we are feeling more comfortable that this is a manageable situation after only 48 hours," he said. "We expect the investigation will take some time, although our primary concern at this point remains how long a fix for the issues would take, as well as any regulatory or design changes required to mitigate the uncontained failure."
"Bombardier had been looking to flight test progress as a driver of orders, but last week's engine incident has halted flight testing for now," he wrote.
The analyst added concerns about the composition of the existing backlog of 203 firm orders and 447 commitments are raised by two customers. U.S.-based
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