Bombardier. Buy, Sell or Hold?

National Bank of Canada Capital Markets analyst Cameron Doerksen said “strong end-market momentum” continues to support his positive stance on Bombardier (Bombardier Stock Quote, Chart, News, Analysts, Financials TSX:BBD.B), even after what he called an “exceptional 2025,” with the shares up 127% year-to-date versus a 26% gain for the S&P/TSX Composite.

As reported by the Globe and Mail, Doerksen acknowledged that valuation is “not as compelling as earlier in the year,” but he still sees upside, citing constructive business-jet fundamentals and building traction in Bombardier’s Defence segment as key catalysts.

He pointed to sustained strength in business-jet activity — flight hours up 8% year-over-year in recent weeks, according to WingX — as well as used-jet inventories at 7.6%, below the 10% threshold typically viewed as a healthy market. Supported by U.S. bonus-depreciation changes, new aircraft orders remain solid, with a Q3 book-to-bill of 1.3× and backlog of $16.6-billion.

“This gives us greater confidence Bombardier can sustain aircraft deliveries at 150+ over multiple years and drive higher-margin aftermarket growth,” he said, adding that easing supply-chain cost pressure in 2026 should also help margins. A larger share of incremental revenue is expected to come from Services and Defence, where profitability is structurally higher.

Defence momentum, he said, continues to build. The number of active government campaigns using Bombardier platforms has “moved materially higher,” with Saab’s GlobalEye surveillance aircraft gaining traction internationally.

He noted several recent or potential orders tied to Bombardier-based special-mission platforms. In Canada, Ottawa’s exploration of the Saab Gripen fighter program could open the door for Bombardier’s participation in manufacturing and long-term support.

“As new contract campaigns convert into firm orders, we expect the defence thematic to remain a tailwind for the stock,” Doerksen said.

He also expects rising free cash flow, which could support continued share buybacks under the NCIB and selective M&A in aftermarket or defence.

Saying Bombardier’s valuation remains “reasonable,” he raised his target to a Street-high $263 from $234 while maintaining an “outperform” rating. The Street average is $226. Based on his updated 2026 model, he said the stock trades at 12.2× EV/EBITDA; above its post-2021 average of 10.2×, broadly in line with aerospace OEM peers at 12.1×, and at a discount to the wider aerospace and defence group at 13.0×.

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