This analyst simply raised his value goal on Bombardier

Desjardins Securities analyst Benoit Poirier has raised his goal on Bombardier (Bombardier Inventory Quote, Chart, Information, Analysts, Financials TSXV:BBD.B) after the corporate secured a US$1.18-billion order from Dubai-based non-public aviation supplier Vista International for 40 Challenger 3500 enterprise jets.

As reported by the Globe and Mail, Poirier reiterated his “Purchase” ranking and lifted his goal to a Avenue-high $304 from $260. The present consensus goal stands at $265.23.

The analyst mentioned the Vista order “additional strengthens visibility into the corporate’s FCF algorithm by decade-end” and “will increase conviction in [his] 2030 blue-sky $432 goal.” He added that the deal reinforces his view that Bombardier has no medium-term want for a clean-sheet midsize plane program.

“Lastly, we don’t view the near-term engine supply-chain challenges as affecting the corporate’s long-term trajectory. These points are non permanent and industry-wide, not particular to BBD,” Poirier wrote.

In a report titled Flight Plan Unchanged, printed following Bombardier’s fourth-quarter and full-year 2025 outcomes, Poirier characterised the corporate’s 2026 free money circulate steerage of US$600-million to US$1.0-billion as “overly conservative”.

“BBD mentioned on the decision that its US$600–1,000-million FCF steerage assumes book-to-bill normalizing to roughly 1.0 occasions (down from 1.4 occasions in 2025), partial restoration of provide chain disruption prices in 2H (however offset by strategic investments in defence and R&D) and a spread of working capital outcomes,” he defined.

Whereas the Vista order is unlikely to materially influence 2026 free money circulate because of restricted advances, Poirier expects one other sturdy 12 months for bookings, supported by what he described as sturdy fundamentals within the supply-constrained enterprise jet market, together with file flight exercise, fleet share good points, bonus depreciation, decrease rates of interest, wealth creation dynamics and tight pre-owned stock, together with a rising defence pipeline.

He has modestly lowered his 2026 free money circulate estimate to US$875-million from US$909-million.

With leverage persevering with to say no, Poirier believes Bombardier is nearing the purpose the place it may well shift from a singular deal with debt discount.

“Nevertheless, administration doesn’t but imagine it may well decide to returning money to shareholders,” he mentioned. “The technique is to proceed reducing debt and curiosity expense, concentrating on 1.5 occasions leverage, whereas remaining opportunistic below a ROIC-driven framework.”

He famous administration is evaluating a pipeline of aftermarket M&A alternatives and now forecasts Bombardier will finish 2026 at 1.3 occasions leverage and 2027 at 0.6 occasions, offering important monetary flexibility.

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