Is Bombardier a Buy?

Bombardier (TSX:BBD.B) stock has surged 17% in the last two weeks, breaking its previous high of $110 in October 2024 to make a new all-time high of $181.60. What drove this rally? Is this stock a buy at its new high, or is it a bubble about to pop?

What drove Bombardier’s stock up 17%?

At a time when most companies have been delaying spending due to tariff uncertainty, a few sectors have been increasing spending. Among them were gold mining and defence companies.

Recently, America increased its tariff on Canadian imports to 35%, in line with its other trade partners. However, Bombardier was unaffected as it was protected under the United States-Mexico-Canada Agreement (USMCA). In fact, the business jet maker secured a US$1.7 billion order for 50 Challenger and Global aircraft, along with a long-term maintenance contract from a new customer. There is also an option for 70 more aircraft with maintenance service which, if exercised, can bring the order value to US$4 billion.

This order announcement drove the stock up as much as 43% in July. The next growth rally came in September over expectations of interest rate cuts. Bombardier is also set to bring into operation its Global 8000 aircraft in the second half.

A majority of the company’s orders are delivered in the fourth quarter, which pushes the cash flow to that quarter. Thus, its stock price tends to rise in the latter half of the year.

Bombardier is on track to meet its fiscal 2025 guidance of US$9.25 billion in revenue, up 6.7% year-over-year, and over 150 aircraft deliveries. The company also expects to double its free cash flow to $500–$800 million from $232 million in 2024. Thus, it comes as no surprise that the business jet maker’s share price finally reacted to the earnings figures.

Bombardier stock has ridden its seasonal September rally since 2022, when the company emerged from the pandemic.

Is Bombardier stock a buy?

The recent rally has put Bombardier stock in the overbought category with a Relative Strength Index (RSI) of 78. The RSI examines the last 14-day stock price momentum on a scale of 0–100, with a reading above 70 indicating overbought conditions and below 30 indicating oversold conditions.

It is trading at a forward-price-to-earnings (P/E) ratio of 16.7 times, which is the highest in the last five quarters. The latest order win of $1.7 billion will see order deliveries begin in 2027 and has not been captured in this ratio. Now may not be a good time to buy the stock.

This is a stock whereby timing can significantly impact your returns. Unlike a few growth stocks, such as Loblaw, that grow throughout the year, Bombardier witnesses growth spurts, whereby its share price grows by double digits in a week or a month and then remains flat or falls for a few months before the next growth spurt, if any.

Thus, it has a beta of 2.9. Beta is a measure of a stock’s volatility against the market, which has a beta of 1. Beta does not tell if the share price moves in the same direction as the market, but represents the gap between market momentum and the momentum of the stock.

The stock tends to fall in the April to June period after it reports seasonally weak first-quarter earnings. That is a good time to buy the stock.

How to invest in this stock?

Those who bought Bombardier stock on March 28, 2024 earned 212% capital appreciation, and those who bought it at the same time in 2025 saw a 126% rally. In some years, there are deviations, as was the case in 2023 when the stock peaked in March 2023.

Thus, you should look at the RSI, P/E value, order book, and discount from the 52-week high when buying the stock. For now, holding is the best way to generate returns.