Bombardier Inc.'s Inclusion in the FTSE All-World Index: A Strategic Inflection Point for Long-Term Investors?

The question of whether Bombardier Inc.'s inclusion in the FTSE All-World Index represents a strategic inflection point for long-term investors hinges on reconciling conflicting data about its index status and analyzing valuation momentum alongside institutional adoption signals. While the company's recent financial performance suggests robust growth, the ambiguity surrounding its inclusion in the FTSE All-World Index complicates the narrative.

Valuation Momentum: A Premium on Growth

Bombardier's trailing P/E ratio of 42.5 as of September 2025 indicates that investors are paying a premium for its earnings, a reflection of confidence in its future prospectsBombardier (BBD-B.TO) - P/E ratio [https://companiesmarketcap.com/bombardier/pe-ratio/]^[5]. This contrasts with its forward P/E of 22.77, which implies a more tempered view of projected earnings growthBombardier Inc. (BBD-B.TO) Stock Major Holders [https://finance.yahoo.com/quote/BBD-B.TO/holders/]^[4]. The divergence between these metrics underscores a market that is optimistic yet cautious.

The company's financials reinforce this optimism. Quarterly revenue growth hit 18.80% in the trailing twelve months, with Q1 2025 revenues surging 19% year-over-year to $1.5 billion, driven by increased aircraft deliveries and a thriving Services businessBombardier Q1 2025 Revenues, Earnings, Free Cash Flow, All Jump Double-Digits Year-Over-Year [https://bombardier.com/en/media/news/bombardier-q1-2025-revenues-earnings-free-cash-flow-all-jump-double-digits-year-over]^[3]. Adjusted EBITDA for Q1 2025 rose 21% year-over-year to $248 million, while adjusted EPS climbed 69% to $0.61Bombardier Q1 2025 Revenues, Earnings, Free Cash Flow, All Jump Double-Digits Year-Over-Year [https://bombardier.com/en/media/news/bombardier-q1-2025-revenues-earnings-free-cash-flow-all-jump-double-digits-year-over]^[3]. These figures suggest that Bombardier is not only regaining its footing but also outperforming expectations in a competitive sector.

However, the high trailing P/E ratio raises questions about sustainability. If earnings fail to meet the elevated expectations embedded in the stock price, the valuation could face downward pressure. This tension between current performance and future projections is a critical consideration for long-term investors.

Institutional Adoption: Mixed Signals Amid Index Uncertainty

Institutional ownership of Bombardier stands at 2.03% as of July 2025Bombardier Inc. (BBD-B.TO) Stock Major Holders [https://finance.yahoo.com/quote/BBD-B.TO/holders/]^[4], a modest figure compared to its market capitalization of $13.06 billionBombardier (BDRBF) Statistics & Valuation Metrics [https://stockanalysis.com/quote/otc/BDRBF/statistics/]^[2]. Yet, recent changes in ownership patterns hint at growing interest. For instance, the Vanguard FTSE All-World ex-US Small-Cap Fund became a notable shareholder, holding 276,680 shares as of April 2025Bombardier Inc. (BBD-B.TO) Stock Major Holders [https://finance.yahoo.com/quote/BBD-B.TO/holders/]^[4], while Hood River Capital Management LLC reduced its stake by 4.4% over the past 12 monthsBombardier Inc. (TSX:BBD.B) dropped from FTSE All-World Index [https://www.marketscreener.com/quote/stock/BOMBARDIER-INC-1409152/news/Bombardier-Inc-TSX-BBD-B-dropped-from-FTSE-All-World-Index-38058839/]^[1]. These shifts reflect a bifurcated institutional sentiment: some investors are capitalizing on Bombardier's momentum, while others remain cautious.

The potential (or perceived) inclusion of Bombardier in the FTSE All-World Index could amplify institutional adoption. Historically, index inclusion drives inflows from passive and active funds seeking broad market exposure. However, the data here is contradictory. Some sources claim Bombardier was added to the index in June 2025Bombardier Inc. (BBD-B.TO) Stock Major Holders [https://finance.yahoo.com/quote/BBD-B.TO/holders/]^[4], while others confirm its removal in September 2015Bombardier Inc. (TSX:BBD.B) dropped from FTSE All-World Index [https://www.marketscreener.com/quote/stock/BOMBARDIER-INC-1409152/news/Bombardier-Inc-TSX-BBD-B-dropped-from-FTSE-All-World-Index-38058839/]^[1] and note no subsequent re-inclusionBombardier (BBD-B.TO) - P/E ratio [https://companiesmarketcap.com/bombardier/pe-ratio/]^[5]. This inconsistency suggests either a data error or a recent, unpublicized re-inclusion. For now, investors must operate under uncertainty.

Strategic Implications for Long-Term Investors

The interplay between valuation momentum and institutional adoption creates a nuanced investment case. Bombardier's financial performance—marked by double-digit revenue and earnings growth—positions it as a compelling candidate for long-term portfolios. However, the lack of clarity around its FTSE All-World Index status introduces volatility. If the company were indeed re-included, the resulting institutional inflows could further fuel its valuation. Conversely, if the index inclusion is a misinterpretation of data, investors might face a correction in expectations.

A key risk lies in the company's high trailing P/E ratio. While forward guidance and earnings growth justify some premium, a misalignment between current valuations and future performance could lead to underperformance. Long-term investors must weigh this against Bombardier's strategic strengths, such as its leadership in the aerospace services sector and its ability to capitalize on global demand for regional aircraft.

Conclusion

Bombardier Inc. stands at a crossroads. Its valuation metrics and financial performance signal a company in ascent, yet the unresolved question of its FTSE All-World Index status introduces ambiguity. For long-term investors, the decision to allocate capital hinges on two factors: the resolution of index inclusion uncertainty and the sustainability of Bombardier's earnings growth. If the company can maintain its momentum while securing broader institutional adoption, it may indeed represent a strategic inflection point. However, prudence dictates a cautious approach until the data aligns more clearly.