This analyst just raised his price target on Bombardier

Desjardins Securities analyst Benoit Poirier has raised his target on Bombardier (Bombardier Stock Quote, Chart, News, Analysts, Financials TSXV:BBD.B) after the company secured a US$1.18-billion order from Dubai-based private aviation provider Vista Global for 40 Challenger 3500 business jets.

As reported by the Globe and Mail, Poirier reiterated his “Buy” rating and lifted his target to a Street-high $304 from $260. The current consensus target stands at $265.23.

The analyst said the Vista order “further strengthens visibility into the company’s FCF algorithm through decade-end” and “increases conviction in [his] 2030 blue-sky $432 target.” He added that the deal reinforces his view that Bombardier has no medium-term need for a clean-sheet midsize aircraft program.

“Finally, we do not view the near-term engine supply-chain challenges as affecting the company’s long-term trajectory. These issues are temporary and industry-wide, not specific to BBD,” Poirier wrote.

In a report titled Flight Plan Unchanged, published following Bombardier’s fourth-quarter and full-year 2025 results, Poirier characterized the company’s 2026 free cash flow guidance of US$600-million to US$1.0-billion as “overly conservative”.

“BBD said on the call that its US$600–1,000-million FCF guidance assumes book-to-bill normalizing to approximately 1.0 times (down from 1.4 times in 2025), partial recovery of supply chain disruption costs in 2H (but offset by strategic investments in defence and R&D) and a range of working capital outcomes,” he explained.

While the Vista order is unlikely to materially impact 2026 free cash flow due to limited advances, Poirier expects another strong year for bookings, supported by what he described as robust fundamentals in the supply-constrained business jet market, including record flight activity, fleet share gains, bonus depreciation, lower interest rates, wealth creation dynamics and tight pre-owned inventory, along with a growing defence pipeline.

He has modestly reduced his 2026 free cash flow estimate to US$875-million from US$909-million.

With leverage continuing to decline, Poirier believes Bombardier is nearing the point where it can shift from a singular focus on debt reduction.

“However, management does not yet believe it can commit to returning cash to shareholders,” he said. “The strategy is to continue lowering debt and interest expense, targeting 1.5 times leverage, while remaining opportunistic under a ROIC-driven framework.”

He noted management is evaluating a pipeline of aftermarket M&A opportunities and now forecasts Bombardier will end 2026 at 1.3 times leverage and 2027 at 0.6 times, providing significant financial flexibility.

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