Bombardier (TSX:BBD.B) has skyrocketed 38% in July. Moreover, it has gained about 99.7% over the past year. Despite these substantial gains, there is still significant upside potential ahead, especially as the company’s performance is likely to accelerate in the second half of 2025. This means it’s not too late to buy the shares of this business jet manufacturer.
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Here’s what drove Bombardier stock in July
The recent momentum in Bombardier stock was driven by the announcement of a significant order for 50 aircraft, along with a long-term service agreement. The total value of the initial deal is pegged at US$1.7 billion, with deliveries scheduled to start in 2027. Moreover, the unnamed customer has secured options for an additional 70 jets. Should those options be exercised, the total value of the deal could climb to more than US$4 billion.
This blockbuster agreement sparked renewed confidence in Bombardier’s growth prospects. The scale and structure of the deal, combining both aircraft sales and ongoing service revenues, suggest a healthy long-term demand for business jets, especially at the high end of the market where Bombardier operates. It also sends a powerful signal to the market that Bombardier’s fundamentals remain solid, with its product lineup and operational strength continuing to win major clients.
Why Bombardier stock has room to run
Bombardier’s latest quarterly results may have raised a few eyebrows, but there are significant catalysts that could continue to push the stock higher. It reported a dip in revenue in the second quarter (Q2), primarily due to a temporary slowdown in large aircraft deliveries. However, with a robust delivery schedule set for the second half of the year, Bombardier’s financials will likely get a significant boost.
A key reason for optimism lies in the company’s strategic investments in inventory, which are already in place to support a heavier delivery load in the back half of the year. Notably, this includes a higher proportion of large cabin jets, aircraft that command better pricing and margins. This will support its profitability and free cash flow. Bombardier also anticipates a few more deliveries in Q3 compared to the same period last year, further contributing to its free cash flow generation.
Adding to the momentum is the continued strength of Bombardier’s services segment, which saw a 16% year-over-year jump in the second quarter and now accounts for 29% of total revenue. The high-margin nature of the services business gives the company an additional engine of stable, recurring income.
The second quarter brought in a healthy flow of new orders, including from both repeat and new customers. That helped push the company’s order backlog to $16.1 billion, bolstered by a strong 2.3x book-to-bill ratio. In plain terms, Bombardier is witnessing solid demand, which augurs well for growth.
The company is also making meaningful inroads into high-return areas like defence and aftermarket services, both of which promise stronger margins and reduced cyclicality.
Taken together, its delivery momentum, service revenue growth, healthy backlog, and expanding footprint in high-return-on-invested-capital segments all suggest that Bombardier stock has more room to run.
Bottom line
Looking ahead, the second half of 2025 is expected to mark an acceleration in Bombardier’s performance, which could support continued upward momentum in this Canadian stock. That means investors who missed the July surge may still have an opportunity to participate in the company’s longer-term upside potential.
With strong fundamentals, growing demand, and a multi-billion-dollar order in the pipeline, Bombardier remains a compelling story in the aerospace sector. Bombardier’s focus on diversifying revenue streams and expanding its aftermarket services also bodes well for sustainable growth in the years to come.
