Bombardier (TSX: BBD.B) rose 38% in July. Moreover, it has won around 99.7% in the past year. Despite this substantial profit, there is still a considerably upward potential ahead, especially because the performance of the company will probably accelerate in the second half of 2025. This means that it is not too late to buy the shares of this business jet manufacturer.
This is what Bombardier stock in July Dreef
The recent momentum in Bombardier shares was powered by the announcement of a considerable order for 50 aircraft, together with a long-term service agreement. The total value of the initial deal is linked to US $ 1.7 billion, with deliveries planned to start in 2027. Moreover, the public customer has protected options for another 70 jets. If those options are exercised, the total value of the deal could rise to more than US $ 4 billion.
This blockbuster agreement led to renewed confidence in the growth prospects of Bombardier. The scale and structure of the deal, which combines both the sale of aircraft and ongoing service income, suggest a healthy demand in the long term for business jets, especially the high-end of the market where Bombardier is active. It also sends a powerful signal to the market that the basic principles of Bombardier remain solid, with its product setup and operational strength that large customers continue to win.
Why Bombardier Stock has room to run
The last quarterly results from Bombardier may have raised a few eyebrows, but there are important catalysts who can continue to push the stock higher. It reported a turnover dip in the second quarter (Q2), mainly as a result of a temporary delay in large aircraft deliveries. With a robust delivery schedule for the second half of the year, however, Bombardier’s financial data will probably get a considerable boost.
An important reason for optimism lies in the strategic investments of the company in the inventory, which are already present to support a heavier delivery tax in the back of the year. This in particular includes a larger part of the large cabinets, planes that recommend better prices and margins. This will support its profitability and free cash flow. Bombardier also anticipates a few deliveries in Q3 compared to the same period last year, which further contributes to the generation of free cash flow.
Adding the momentum is the constant power of the Bombardier service segment, which saw a 16% jump on an annual basis in the second quarter and is now good for 29% of the total turnover. The high margin character of the Services Business gives the company an extra engine of stable, recurring income.
The second quarter brought in a healthy stream of new orders, including both repeated and new customers. That helped to push the company’s order to $ 16.1 billion, reinforced by a strong 2.3x book-to-bill ratio. In clear terms, Bombardier witnesses a solid question that is good for growth.
The company also makes meaningful entry into areas with a high return, such as Defense and aftermarket services, both of which promise stronger margins and reduced cyclicity.
In summary, the delivery momentum, the growth of service revenues, a healthy backlog and the expansion of footprint in segments with a high return-on-in-invested capital segments are all that Bombardier shares have more room to walk.
Bottom Line
Looking ahead that the second half of 2025 will mark an acceleration in the performance of Bombardier, which could support the constant momentum in these Canadian shares. That means that investors who have missed the rise in July may still have the opportunity to participate in the upward potential of the company.
With strong foundations, growing demand and a multi-billion Dollarorde in the pipeline, Bombardier remains a mandatory story in the space sector. The focus of Bombardier on diversifying income flows and expanding his aftermarket services is also a good omen for sustainable growth in the coming years.
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