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On Thursday, RBC Capital Markets maintained their Outperform rating on Bombardier Inc (TSX:BBDb). (BBD/B:CN) (OTC: BDRBF) shares, highlighting the company as a Top Idea. This endorsement comes after a significant development regarding U.S. reciprocal tariffs which could have impacted the Canadian aerospace company. With a market capitalization of $6.3 billion and a P/E ratio of 17.46x, Bombardier (OTC:BDRBF) has demonstrated strong financial performance, as shown by InvestingPro data.
Bombardier, known for its aircraft manufacturing, was previously identified by RBC Capital as the most vulnerable to potential tariffs within their coverage universe. This was due to the fact that Bombardier completes its aircraft in Canada and the U.S. market accounted for 63% of the company’s revenues in 2023. However, a recent announcement has provided relief by exempting goods that comply with the USMCA, which includes Bombardier’s aircraft, from these tariffs. The company has maintained solid growth, with revenue increasing by 7.69% in the last twelve months.
The analyst at RBC Capital expressed a very positive outlook as a result of this exemption, stating that it removes a significant concern that was previously expected to affect Bombardier’s valuation. The announcement led to an immediate positive reaction in the stock market, with Bombardier shares trading 7% higher on Thursday. According to InvestingPro analysis, the stock appears undervalued, with analysts maintaining a bullish consensus rating of 1.94 (where 1 is Strong Buy and 5 is Strong Sell).
Looking ahead, the analyst anticipates that Bombardier’s stock will continue to trade higher on Friday following the tariff exemption news. Despite the ongoing evolution of trade policy and the continued potential for tariffs to influence the company’s valuation, the recent development is seen as a major positive for Bombardier.
In comparison to its global peers, Bombardier is now considered to be in a stronger relative position. While other companies may be more negatively affected by the latest tariff announcements, Bombardier’s compliance with the USMCA has provided it with a competitive advantage in the current trade environment.
In other recent news, Bombardier Inc. has been the focus of several analyst updates. BMO Capital Markets reaffirmed its Outperform rating on Bombardier, raising the price target to Cdn$135, reflecting confidence in the company’s upcoming financial performance and its strong foundation for continued outperformance in 2025. Similarly, UBS upgraded Bombardier’s stock from ’Sell’ to ’Neutral’, increasing the price target to C$95, citing better-than-expected aircraft bookings and a positive strategy in maintaining production rates. RBC Capital also maintained an Outperform rating on Bombardier, although it slightly lowered the price target to C$130 due to anticipated lower margins from supply chain challenges. Bombardier’s financial targets for 2025, including EBITDA and free cash flow estimates, remain a key focus, with RBC Capital highlighting the company’s potential for a double-digit free cash flow yield. Meanwhile, Breeze Holdings Acquisition Corp. is facing a potential delisting from the OTCQX market due to non-compliance with financial standards. The company is actively pursuing a business combination with YD Biopharma Limited, aiming for a NASDAQ listing to address the compliance issues. These developments underscore the dynamic landscape for both Bombardier and Breeze Holdings as they navigate financial and strategic challenges.
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