Valued at a market cap of $8.4 billion, Bombardier (TSX:BBD.B) has staged a remarkable comeback in recent years. The TSX stock bottomed out in late 2020 and has returned close to 600% to shareholders in the last five years.
While Bombardier stock has crushed the broader markets, it trades 22% below its 52-week highs, allowing you to buy the dip. So, let’s see if this Canadian stock can continue to deliver outsized gains over the next three years.
How did Bombardier perform in Q1 of 2025?
In the first quarter (Q1) of 2025, Bombardier demonstrated strong momentum despite a turbulent macro environment. The aircraft manufacturer reported higher revenue and net income than in the year-ago period. Moreover, it improved profit margins and reduced cash usage, which highlights the effectiveness of the company’s strategic transformation following its pivot to focus exclusively on business aviation.
CEO Éric Martel outlined Bombardier’s ambitious 2025 guidance during the annual shareholder meeting, projecting revenues of more than $9.25 billion. The management forecast adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) of greater than $1.55 billion, with adjusted EBIT surpassing $1 billion.
In 2025, Bombardier expects to deliver more than 150 aircraft and generate free cash flow between $500 million and $800 million, representing meaningful increases across all financial metrics compared to 2024.
This positive outlook follows a successful 2024 when Bombardier achieved its $2 billion service revenue target a full year ahead of schedule while continuing to strengthen its balance sheet. The company’s improved financial performance has been recognized by credit rating agencies, with both Moody’s and S&P Global Ratings upgrading Bombardier’s credit ratings in 2024 and Moody’s recently revising its outlook from stable to positive.
Bombardier has identified two key growth pillars beyond its core business jet manufacturing operations. The service business continues to expand, generating a growing proportion of total revenue. Bombardier also plans to expand its network with additional capacity and new service offerings.
Additionally, Bombardier Defense represents another strategic growth avenue, with management highlighting significant potential as geopolitical dynamics evolve and countries seek enhanced border security and monitoring capabilities.
Later in 2025, Bombardier will introduce its newest business jet, the Global 8000, which is described as the fastest civilian aircraft since the Concorde. This engineering achievement reinforces Bombardier’s reputation for technological innovation and product excellence.
Is this TSX stock undervalued right now?
Chairman Pierre Beaudoin expressed confidence that Bombardier’s strategic positioning, financial discipline, and skilled workforce have created a more resilient and diversified entity positioned to navigate current market uncertainties while contributing to Canada’s economic growth and security initiatives.
Analysts tracking Bombardier expect its sales to rise from $8.67 billion in 2024 to $10.23 billion in 2028. Comparatively, adjusted earnings per share are forecast to expand from $5.16 to $9.81 in this period. While revenue growth is forecast at 4.2%, earnings are estimated to expand at a compounded annual growth rate of 17.4% through 2028. Moreover, the company’s free cash flow is forecast to increase from $230 million in 2024 to $1.15 billion in 2028.
Today, the TSX stock trades at 14 times forward earnings. If Bombardier stock maintains a similar multiple, it will be priced at $135 in early 2028, indicating an upside potential of almost 60% from the current price.
