Should you’ve received $400 to spend and need to make it rely, Bombardier (TSX:BBD.B) is perhaps the neatest Canadian inventory to select proper now. It’s no speculative penny inventory. It’s a serious aerospace firm with steady contracts, bettering numbers, and room to develop if issues go properly. Let’s take a look at why this is smart, but in addition the place to remain sharp.
About Bombardier
Bombardier designs, builds, and companies enterprise jets. Its most up-to-date abstract exhibits it’s doing properly regardless of earlier challenges. Over the fiscal yr ended December 31, 2024, Bombardier reported revenues of $8.7 billion and web earnings of $370 million, with diluted earnings per share (EPS) of $3.40. Its ahead worth‑to‑earnings (P/E) ratio is now about 18.7, which suggests the TSX inventory within reason priced given its earnings potential.
You don’t need outdated data right here. Bombardier reported first-quarter 2025 income at about $1.5 billion, with a backlog of $14.2 billion in orders as of March 31. It additionally delivered 23 plane in that quarter. That backlog issues so much. It means Bombardier has income lined up properly into the longer term.
That backlog and supply momentum are key. The TSX inventory has been investing in its International 7500 jet, which is flying extra usually and even setting pace information. It’s additionally increasing service operations, together with new centres and partnerships. These strikes intention to lock in recurring income, not simply one-time jet gross sales.
Concerns
Lately, the TSX inventory has gained a bit. Over the previous 12 months, Bombardier’s share worth is up roughly 69%, buying and selling close to its 52-week excessive. That’s a strong run, however analysts see extra upside. There are dangers. Bombardier carries a good quantity of debt, about $8.2 billion towards $1.5 billion in money. That’s a damaging web money place of roughly $6.7 billion. Increased rates of interest might strain borrowing prices. Additionally, plane manufacturing is dependent upon financial progress; a downturn might influence new orders.
Valuation-wise, the ahead price-to-earnings (P/E) of 20.6 affords affordable entry, given constructive earnings and backlog. The trailing P/E is round 42, displaying traders count on vital progress. If Bombardier delivers constant earnings and meets its backlog, the upside expectations could repay.
Shopping for with $400 will get you roughly two and a half shares at present costs. That’s sufficient to personal a small stake and profit from any upward motion. Contemplate including extra later if outcomes maintain up and debt stays manageable. On the plus facet, Bombardier has sturdy latest earnings, rising deliveries, strong backlog, and analyst help. On the flip facet, excessive debt and reliance on world financial energy are actual issues. If a recession hits or rates of interest keep excessive, progress might stall.
Backside line
For a $400 funding, you’re not betting your life financial savings. You’re shopping for a slice of a world aerospace participant that has recovered from previous bother and is displaying momentum. If administration executes properly, this might be a sensible selection. If nothing else, Bombardier represents a guess on Canada’s capacity to supply high-end jets and construct a world presence. For a small amount of cash, you get publicity to that story with out overpaying.
So sure, it’d simply be the neatest Canadian inventory to purchase with $400 proper now. Not as a result of it’s a positive factor, however as a result of the setup balances confirmed operations, bettering earnings, respectable valuation, and clear dangers. If all goes properly, that $400 might flip into one thing extra over the medium time period.
