Valued at a market cap of just about $18 billion, Bombardier (TSX:BBD.B) inventory is up a staggering 1,740% within the final 5 years. It means a $500 funding within the TSX inventory 5 years again could be price greater than $9,000 immediately.
Bombardier designs, manufactures, and sells enterprise plane and associated structural parts worldwide. It additionally provides numerous companies, together with components, service centres, good companies, coaching, and technical publications. The corporate serves multinational firms, constitution and fractional possession suppliers, governments, and personal people.
As previous returns don’t matter a lot to present and future buyers, let’s see if Bombardier inventory remains to be purchase proper now.
The bull case for Bombardier inventory
Bombardier’s second-quarter (Q2) 2025 outcomes showcase a enterprise aviation producer firing on a number of cylinders, as a landmark 50-aircraft fleet order highlights its sturdy market place. The confidential buyer order, scheduled for supply beginning in 2027, contributed to a sturdy 2.3 instances unit book-to-bill ratio and pushed Bombardier’s backlog previous US$16 billion for the primary time.
Bombardier reported income of US$2 billion in Q2, regardless of provide chain headwinds. Whereas plane deliveries of 36 models have been three fewer than the prior 12 months, this was fully by design as Bombardier front-loads medium plane deliveries within the first half to accommodate a World-heavy supply schedule within the second half. It delivered 59 plane within the first six months, matching 2024 ranges and staying on monitor for full-year steerage.
The Companies enterprise continues to carry out nicely, producing almost US$600 million in gross sales, representing a 16% year-over-year enhance. This phase accounts for 29% of complete gross sales, which showcases diversification past plane manufacturing.
Robust fleet utilization charges and low availability of pre-owned Challenger and World plane underscore wholesome market fundamentals supporting continued aftermarket progress.
Bombardier’s defence enterprise gained momentum with a notable order for the World 6500 from Sweden’s SAP and a memorandum of understanding with Leonardo for maritime patrol missions. CEO Eric Martel emphasised defence as a key progress avenue, supported by increasing worldwide partnerships and elevated business presence.
Monetary well being continues to enhance with the profitable refinancing of US$500 million in senior notes, extending maturities to 2033 whereas lowering common debt prices. Each S&P and Moody’s upgraded their credit score assessments, which signifies confidence within the firm’s deleveraging trajectory and operational execution.
Bombardier maintained its 2025 steerage whereas positioning for a powerful second half. Administration expects to ship over 91 plane within the ultimate six months, producing greater than US$1 billion in earnings earlier than curiosity, tax, depreciation, and amortization.
The World 8000’s first supply in This fall will command a US$3 million premium over the World 7500, offering extra margin growth.
Is the TSX inventory nonetheless undervalued?
Analysts monitoring the TSX inventory forecast income to rise from US$8.67 billion in 2024 to US$11 billion in 2029. Throughout this era, adjusted earnings per share are anticipated to extend from US$5.16 to US$12.14.
At this time, Bombardier inventory trades at 18.6 instances ahead earnings, which is affordable, given its progress estimates. If it maintains an identical a number of, it may achieve over 65% inside the subsequent 4 years. Regardless of its monstrous rally, Bombardier inventory is well-positioned to ship outsized good points to shareholders in 2025 and past.
