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Bombardier (TSX:BBD.B) Could Be 11% Overvalued After New Defence Wins

Simply Wall St · 2d ago

Bombardier (TSX:BBD.B) is back in focus after securing a 10 year support agreement with Sweden’s defence agency for Global 6500 jets and adding new Global 6500 aircraft deliveries to South Korea’s Electronic Warfare program.

See our latest analysis for Bombardier.

Those defence wins land at a time when Bombardier’s momentum has been strong, with a 1 year total shareholder return of 125.59% and a 5 year total shareholder return of about 9x, alongside a 90 day share price return of 49.31%.

If you are looking for other defence and aerospace related opportunities, it could be worth scanning the broader supply chain and adjacent technologies through the 35 power grid technology and infrastructure stocks

After Bombardier stock’s strong run and with shares trading above the average analyst price target yet at a discount to some intrinsic estimates, is the market being too cautious about sustainability or simply pricing in recent wins early?

Most Popular Narrative: 11.4% Overvalued

Bombardier last closed at CA$362.02 compared with a most widely followed fair value estimate of CA$325.07, which frames the current debate about how much future execution is already priced in.

Robust growth in Bombardier's services and aftermarket business, including expanded service facilities and high utilization rates across a growing fleet, points to a durable, high margin recurring revenue stream that should support long term improvements in earnings stability and free cash flow.

Read the complete narrative.

Curious what kind of revenue climb, margin profile, and earnings power are baked into that fair value for Bombardier? The narrative leans on a tight mix of premium jet demand, expanding defense work, and steadily improving profitability assumptions that are anything but casual, back-of-the-envelope guesses.

Result: Fair Value of CA$325.07 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, that fair value narrative for Bombardier still leans on smooth business jet demand and easing supply chain pressures, both of which could prove more fragile than expected.

Find out about the key risks to this Bombardier narrative.

Another View: Bombardier Through the Earnings Multiple Lens

While the most popular Bombardier narrative points to a fair value of CA$325.07 and labels the stock as overvalued, the earnings based view tells a different story. At a P/E of 26.6x, Bombardier trades well below the fair ratio of 38.4x and beneath both peer and broader industry averages above 40x. This signals a sizeable gap that could either reflect valuation risk being priced out or an opportunity that the market has not fully embraced yet. Which side of that argument do you think fits your thesis?

See what the numbers say about this price — find out in our valuation breakdown.

TSX:BBD.B P/E Ratio as at Jul 2026
TSX:BBD.B P/E Ratio as at Jul 2026

Next Steps

If the mixed messages around Bombardier leave you on the fence, this may be a good time to review the data, weigh the trade offs, and size up the 4 key rewards and 3 important warning signs

Looking For More Investment Ideas Beyond Bombardier?

If Bombardier has sharpened your focus, do not stop here. Broaden your opportunity set with a few targeted stock shortlists built from clear, data driven filters.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.