BMO Capital Markets Maintains Outperform on Bombardier
BMO Capital Markets reiterated an Outperform rating on Bombardier and increased its price target to C$375, up from the September 3 close of C$304.30, which translates to an implied 23 percent total return for investors. The brokerage argued that the recent sell‑off in the Canadian business‑jet maker’s shares, driven by concerns over tariffs and potential supply‑chain disruptions, has been overstated and that demand remains resilient.
The note emphasized that BMO does not anticipate any meaningful tariff impact on Bombardier’s aerospace business, asserting that the sector is likely to remain exempt even if trade tensions between Canada and the United States intensify. Moreover, BMO observed that neither tariffs nor prevailing interest‑rate levels have exerted discernible pressure on the company’s order pipeline, which is tracking in line with, or ahead of, internal expectations.
Bombardier is planning to acquire MHI Canada Aerospace, the supplier of wings for its Global 5500, Global 6500 and Challenger 3500 aircraft. BMO expects this acquisition to bring a larger portion of the supply chain in‑house, thereby reducing supply‑chain risk and potentially delivering cost savings as production volumes increase.
The brokerage remains confident in its third‑quarter and full‑year 2026 forecasts, which project free cash flow of C$1.4 billion. Leverage is expected to reach the company’s target level by year‑end, and BMO indicated that shareholder distributions could commence as early as 2027, supported by strong cash generation. The firm also highlighted that excess cash should enable continued investment in higher‑growth areas such as aftermarket services and defence.