Bombardier Inc. Class B shares surged 4.41% on Friday, closing at C$314.87 in Toronto, as investors embraced the company's accelerating cash flow trajectory and strong demand for its Global 8000 business jet. The stock now trades just below its 52-week high of C$329.16, despite a broader market decline with the S&P/TSX Composite Index falling 0.3%.
The rally comes amid a series of favorable developments for the Canadian aerospace manufacturer. Canada's luxury tax on high-end aircraft, which had been a significant drag on sales, is being rolled back. According to the Canada Revenue Agency, as of November 5, 2025, the tax no longer applies to planes or boats, though it remains on luxury cars above a certain threshold. The tax generated C$913.4 million from its introduction in fall 2022 through March 2025, but Bombardier CEO Éric Martel had previously stated it blocked more than half a dozen business jet deals. The removal is expected to unlock pent-up demand.
Bombardier's Global 8000 program continues to gain traction. On June 16, the company delivered its first Global 8000 in Africa to BUA Group of Nigeria, highlighting the jet's Mach 0.95 speed and 8,000-nautical-mile range. Founder Abdul Samad Rabiu praised its performance, while Martel called the delivery a major milestone. The Global 8000 is a key growth driver, competing in the ultra-long-range segment alongside the Global 7500, Gulfstream G700, and G800.
Financial results underscore the turnaround. First-quarter revenue reached $1.6 billion, up 5% year-over-year, with services revenue surging 25% to $617 million. Free cash flow swung to $360 million, and the backlog stood at $20.3 billion as of March 31. The unit book-to-bill ratio hit 3.6 times, indicating orders far outpaced deliveries. Management now expects free cash flow to exceed $1.0 billion in 2026, up from previous guidance, while delivery and revenue targets remain unchanged.
However, competitive pressures are mounting. Dassault Aviation announced on Friday that its Falcon 10X took its first flight, targeting service entry in 2027. The long-range jet directly competes with Bombardier's top models, intensifying rivalry in the high-margin segment. Analysts warn that any delivery delays, softer orders, margin compression in services, or new trade tensions could pressure the stock, which trades near the average 12-month analyst target of C$314.43.
Bombardier also benefits from exemptions under the USMCA trade agreement, but tariff discussions and certification issues remain sector headwinds. Investors are closely watching the company's ability to convert its robust backlog into sustained cash flow while maintaining pricing power and expanding its services business.
With the luxury tax removed and Global 8000 momentum building, Bombardier's stock story hinges on execution. The next test will be whether the company can meet delivery schedules, fend off competitors, and grow its high-margin services revenue in a challenging macroeconomic environment.
