Bombardier is our “Top Idea”, analyst says

RBC Dominion Securities analyst James McGarragle named Bombardier his “top idea” for 2026, arguing the stock remains “a compelling opportunity despite the 130% move year-to-date.”

As reported by the Globe and Mail, McGarragle raised his price target to $263.00 from $230.00 and reiterated an “Outperform” rating. The Street average is $226.00.

“We are flagging Bombardier as our top idea into next year,” he said. Despite the rally, he noted the shares still yield 6% on consensus 2026 free cash flow, a “compelling value,” in his view. Near term, he points to robust demand, highlighted by a 1.3× book-to-bill, which positions Bombardier to meet the high end of its FCF guide while supporting backlog visibility out to 2028.

Over the medium to long term, McGarragle sees increased global defence spending as a potential upside catalyst for production targets, while a mix shift toward Challengers and Globals, supported by share gains, should underpin mid- to high-single-digit Services growth through 2030.

“All that to say, we see runway for Bombardier to compound FCF at greater than a low-teen CAGR well into the 2030s; a compelling investment opportunity for shares trading at a 6% FCF yield.”

Bombardier’s defence narrative received another boost on Dec. 11, when HENSOLDT, Lufthansa Technik Defense, and Bombardier Defense confirmed the first aircraft for Germany’s PEGASUS airborne surveillance program had arrived in Hamburg. The platform, a Bombardier Global 6000, completed its transatlantic flight from Wichita and now enters the mission-system integration phase.

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