BMO sees a buying opportunity in this Canadian stock

Investing.com -- Shares of a Canadian business-jet maker have fallen recently on concerns over tariffs and potential supply-chain disruptions, but BMO Capital Markets said the sell-off has gone too far, arguing that demand remains resilient and its 2026 outlook is intact.

BMO maintained an Outperform rating on Bombardier and a C$375 price target, versus C$304.30 at the Sept. 3 close, implying a 23% total return. The brokerage said it sees no meaningful tariff impact and expects aerospace to remain exempt even if trade tensions between Canada and the United States intensify.

The company is also moving to bring more of its supply chain in-house through the planned acquisition of MHI Canada Aerospace, which supplies wings for its Global 5500, Global 6500 and Challenger 3500 aircraft. BMO said the deal should reduce supply-chain risks as production increases, while potentially generating cost savings over time.

BMO said demand activity and the order pipeline are tracking in line with, or ahead of, expectations, with neither tariffs nor interest rates showing discernible pressure on demand. It also said the summer period allowed the company to improve productivity across several production lines.

The brokerage remains confident in its third-quarter and full-year 2026 estimates, which call for C$1.4 billion in free cash flow. With leverage on track to reach the company’s target by year-end, BMO said shareholder distributions could begin as early as 2027, while strong cash generation should allow continued investment in higher-growth areas such as aftermarket services and defense.

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