Sep 28, 2026 11:16am
CIBC
Currently have a $365.00 target. GLTA
September 27, 2026 Flash Research
BOMBARDIER INC.
Key Takeaways From The Eastern Conference
We had the pleasure of hosting BBD at our Annual Eastern
Institutional
Investor Conference in Montreal with Francis Richer de la Fleche,
Vice-
President, Financial Planning & Investor Relations. We came
away from the
fireside chat with four key takeaways: 1) we continue to view
Defense as a
significant long-term growth opportunity; 2) the strength and
duration of
BBD’s backlog support further production growth; 3) BBD is
approaching a
new phase of capital allocation, with management viewing ~$1B of
annual
FCF as a recurring base; and 4) Services remains a meaningful
long-term
growth opportunity, with management targeting ~$4B of revenue by
2030.
Defence Opportunity Continues To Expand
We continue to view Defense as one of the most compelling
long-term
growth opportunities for BBD. Management highlighted that the
company
built a dedicated Defense organization beginning in earnest in
2023, shifting
from largely responding to opportunities brought by
mission-system partners
toward proactively working with customers and partners to shape
solutions
around BBD aircraft. Today, BBD works with a number of primes and
mission-system partners, including Saab, HENSOLDT Lufthansa
Technik
Defense, L3Harris, Sierra Nevada Corporation, and Metrea.
Management
noted that multiple bidders for a given contract can utilize a
BBD platform,
effectively providing the company with multiple opportunities to
participate in
the award. The Global 6500 has seen particularly strong traction,
while
management also noted a growing interest in the Global 8000 and
Challenger platform for defence applications.
BBD remains well on its way toward its ~$1.5B of Defense revenue
objective
by 2030, while management suggested that developments since
establishing
the target have generally expanded the opportunity set. BBD is
also focused
on capturing a greater share of the value of a completed
missionized aircraft
through modification work rather than solely supplying the
underlying aircraft.
Management indicated that, looking toward the end of the decade,
Defense
revenue could be comprised of ~50% - 70% new aircraft sales, and
~30%-
50% modification work, with modifications carrying an attractive
margin.
Backlog Strength Supports Capacity Expansion
We remain encouraged by the visibility provided by BBD's backlog
and
management’s investments to support future growth. Management
highlighted that backlog has roughly doubled from 2020 levels,
with some
products now extending toward the end of the decade. To support
demand,
BBD is adding Challenger 3500 capacity in Montreal, which is
expected to
begin contributing in 2028 and become more fully reflected in
production in
2029. Management indicated that the investment is less than
$150MM and
could support production of 20+ incremental aircraft, resulting
in what it views
as a very attractive payback profile. Management also sees
potential to
increase production across its Global platform over time.