Business jet maker Bombardier’s (TSX:BBD.B) stock jumped 70% year to date, riding on positive news around a major order win of US$1.7 billion on June 30, 2025. This order for 50 new aircraft with an option for US$4 billion worth of more revenue from aircraft deliveries and services sent the stock up 40% in the first three weeks of July. This order win has increased its order book to a decade high of US$16.1 billion.
The effect of the order book was visible in Bombardier’s stock, which is trading at its 14-year high of $164. This brings us to the question: Is Bombardier a good stock to buy now?
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Bombardier’s stock valuation
The recent rally in Bombardier stock has increased its valuation. It is trading at a forward price-to-earnings (P/E) ratio of 19.57 and a price-to-sales (P/S) ratio of 1.9, its highest in five quarters. The high valuation is justified by the new US$1.7 billion order. Moreover, Bombardier CEO, Éric Martel, sees new defence opportunities. The timing of the launch of its Global 8000 flagship aircraft puts Bombardier at the sweet spot to make the most of the opportunity.
While the valuation looks high, S&P Global Ratings has upgraded its outlook from stable to positive. RBC Capital Markets analyst James McGarragle has raised his price target to $202 from $175.
Is there more upside to Bombardier stock?
The business jet maker’s stock initially fell amidst uncertainty around Trump tariffs. In April, the White House clarified that goods under the United States-Mexico-Canada Agreement (USMCA) will be exempted from tariffs. The clarity drove a V-shaped recovery, and the stock surged to $110 in June. Even at that time, the stock was perfectly valued. The jump beyond $110 to $164 came after July 30, when the new order win was announced.
If everything remains stable, Bombardier stock is priced to perfection. The company has maintained its 2025 guidance:
- Grow adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) by 14% to US$1.55 billion.
- Increase free cash flow by 180% to US$650 million at the midpoint of the guided range of US$500 million-US$800 million.
However, the stock could grow further on positive announcements, such as acquisitions, orders for the new Global 8000, service revenue expansion, and more.
Bombardier’s CEO is seeing strong activity in the defence vertical and expects to see more orders. The management’s confidence shows that the demand environment is firming up and more growth is in the cards.
Should you consider buying this stock at its 14-year high?
If you already own Bombardier stock, consider holding it throughout the second half as the company meets its 2025 guidance. And if you are considering buying Bombardier stock, you might want to wait for a while. The stock is currently oversold, with a Relative Strength Index (RSI) of 71. The RSI is a technical indicator that measures the speed and magnitude of a security’s recent price changes to determine if the stock is overbought or oversold.
A slight correction is likely in the third quarter before the stock picks up momentum in the fourth quarter. You could consider buying the stock during the correction.
Like Bombardier, several other growth stocks are expanding their business. Consider diversifying your portfolio across multiple sectors to reduce industry-specific risk.
