To The Moon

Canada’s C$900M defense push is a win for Bombardier! With a transformed business, C$17.5B order backlog, and plans to hit C$10B revenue in 2026—do you think BBD.B is poised for long-term growth?

Will defense orders and top-tier business jets drive further gains, or will currency fluctuations and global risks weigh it down? Share your thoughts on Bombardier’s investment potential below!

The Government of Canada is stepping up efforts to strengthen its domestic defense industry. Industry Minister Melanie Joly announced in Ottawa on Monday that it will invest over C$900 million in defense innovation, with funds allocated to drone technology and a new $Bombardier Inc.(BDRAD)$ aircraft.

This funding is part of the federal government’s defense industry strategy unveiled in February this year. The strategy plans to invest C$6.6 billion over five years, prioritizing domestic production, doubling defense exports, and creating 125,000 jobs within a decade. The funds will be administered through the National Research Council (NRC): more than C$500 million will be used to purchase a Canadian-manufactured Bombardier Global 6500 aircraft for defense technology research and development, while drone innovation centers will be established in Ottawa and Montreal. An additional C$161 million will be invested in quantum technology development.

“We live in a more turbulent and dangerous world, where national security and economic security are inseparable,” Joly told the media.

Bombardier: Transformed Fundamentals, Defense Order as a Catalyst

For investors, Bombardier’s value extends far beyond this government order. The company has undergone a complete transformation—from being debt-ridden with a fragmented business portfolio years ago to an industrial enterprise focused on high-end business jet manufacturing, no longer involved in commercial airliners or train operations.

Financial data confirms this shift. In 2025, the company’s revenue grew by approximately 10% to C$9.6 billion, adjusted EBITDA reached C$1.6 billion, and free cash flow stood at C$1.1 billion. The order backlog climbed to around C$17.5 billion, providing support for future deliveries. Management expects to deliver over 157 aircraft in 2026, with revenue exceeding C$10 billion. Currently, its trailing price-to-earnings (P/E) ratio of about 21x is reasonable amid sustained stable operations.

At the product level, Bombardier boasts a strong moat. Demand for its Challenger and Global series business jets remains robust, with new models consistently setting records. The Global 7500 has set speed records on routes such as New York-London and Tokyo-Los Angeles, completing the Los Angeles-New York flight in just 3 hours and 54 minutes, and achieving ultra-long-haul flights from Sydney to Detroit. The Global 8000 has a top speed approaching Mach 0.95, making it the fastest civil aircraft since the retirement of the Concorde. Behind these records lies product differentiation and stable long-term demand.

This government order not only directly boosts the company’s defense business revenue but also reinforces Bombardier’s status as a national strategic asset. With continued investment under the subsequent defense strategy, the company is expected to receive more support for dual-use (military and civilian) technology development. Additionally, as a significant portion of the company’s sales are denominated in U.S. dollars, fluctuations in the Canadian dollar exchange rate may bring additional flexibility.

Conclusion

Bombardier is at a critical inflection point. Having completed its transformation, the company has seen continuous financial improvement, gained market recognition for new products, and now benefits from policy support and order catalysts through Canada’s defense strategy. Despite lingering uncertainties in global trade and supply chains, Bombardier has established long-term investment value through its focused strategy, leading products, and new role in the defense sector. The order from this C$900 million defense investment is merely the prologue to its next growth chapter.

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