3 Canadian Stocks That Could Thrive if the Loonie Weakens

The loonie has spent the past year bouncing between rate expectations, oil prices, and trade nerves. Lately, it has sat around the low US$0.70 zone, and tends to sag when crude dips or headlines heat up ahead of key trade reviews. If it weakens again, some Canadian firms can look better fast. U.S.-dollar revenue converts into more Canadian dollars, and global competitiveness improves. With that in mind, what Canadian stocks can help during a loonie drop?

CAE

CAE (TSX:CAE) fits that setup as it sells training and simulation into a global market. It runs pilot training centres, trains defence crews, and builds full-flight simulators. Over the last year, demand stayed firm as airlines rebuilt capacity and governments leaned into readiness spending. The business still sees quarter-to-quarter noise from program timing, but long contracts and a deep installed base can keep work flowing.

In fiscal Q3 2026, CAE reported revenue of $1.3 billion and adjusted earnings per share (EPS) of $0.34. Free cash flow came in around $411 million, and net debt leverage improved to about 2.3 times adjusted earnings before interest, taxes, depreciation and amortization (EBITDA). It also ended the quarter with roughly $19.2 billion in adjusted backlog, split between about $8.2 billion in civil and $11 billion in defence. At writing, the Canadian stock trades near 34 times trailing earnings, so investors already price in a lot of good news.

MG

Magna International (TSX:MG) offers a more classic currency kicker. It makes auto parts and systems for major carmakers, and it earns a large share of revenue in U.S. dollars. Over the last year, the market worried about uneven vehicle production, shifting electric vehicle (EV) demand, and tariff chatter. Magna pushed back with the basics: cost control, new program launches, and a focus on margin progress.

The Q4 2025 results showed that discipline. Sales rose 2% to $10.8 billion and adjusted diluted EPS jumped 29% to $2.18, while adjusted EBIT reached $814 million. For the full-year 2025, adjusted diluted EPS landed at $5.73 and free cash flow hit $1.9 billion. For 2026, management expects sales of $41.9 billion to $43.5 billion and adjusted EPS of $6.25 to $7.25, plus $1.6 billion to $1.8 billion of free cash flow. The valuation sits around 22 times trailing earnings, so investors certainly can add this to their watchlist.

BBD

Bombardier (TSX:BBD.B) may give the most direct “loonie leverage” of the three. It builds business jets, sells higher-margin services, and has a growing defence business, with a lot of sales tied to U.S. dollars. Over the last year, it leaned into its turnaround narrative and benefited from strong large-cabin demand, while supply-chain hiccoughs gradually eased. Investors also kept one eye on trade headlines, as sentiment can swing quickly in the aerospace sector.

The latest full-year results backed up the progress. Bombardier’s 2025 revenue rose about 10% to $9.6 billion, and adjusted EBITDA reached $1.6 billion. Free cash flow hit $1.1 billion, and backlog climbed to about $17.5 billion, which supports future deliveries. For 2026, management guided to more than 157 aircraft deliveries, revenue above $10 billion, and adjusted EBITDA above $1.6 billion, while free cash flow should land between $600 million and $1 billion as timing normalizes. The stock trades near 21 times trailing earnings, which looks reasonable if execution holds.

Bottom line

A weaker loonie will not fix a weak business, but it can add a tailwind to a strong one. CAE brings global contracts and a large backlog, Magna brings scale and cash generation, and Bombardier brings a cleaner post-turnaround profile with rising revenue and backlog. If the Canadian dollar stays soft, these three Canadian stocks offer different ways to potentially benefit while still owning real operators, not a pure currency trade, for patient long-term investors.

The post 3 Canadian Stocks That Could Thrive if the Loonie Weakens appeared first on The Motley Fool Canada.

Should you invest $1,000 in Bombardier right now?

Before you buy stock in Bombardier, consider this:

The Motley Fool Canada team has identified what they believe are the top 10 TSX stocks for 2026… and Bombardier wasn’t one of them. The 10 stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 … if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $20,155.76!*

Now, it’s worth noting Stock Advisor Canada’s total average return is 90%* – a market-crushing outperformance compared to 81%* for the S&P/TSX Composite Index. Don’t miss out on our top 10 stocks, available when you join our mailing list!

Get the 10 stocks instantly #start_btn6 { background: #0e6d04 none repeat scroll 0 0; color: #fff; font-size: 1.2em; font-family: 'Montserrat', sans-serif; font-weight: 600; height: auto; line-height: 1.2em; margin: 30px 0; max-width: 350px; text-align: center; width: auto; box-shadow: 0 1px 0 rgba(0, 0, 0, 0.5), 0 1px 0 #fff inset, 0 0 2px rgba(0, 0, 0, 0.2); border-radius: 5px; } #start_btn6 a { color: #fff; display: block; padding: 20px; padding-right:1em; padding-left:1em; } #start_btn6 a:hover { background: #FFE300 none repeat scroll 0 0; color: #000; } @media (max-width: 480px) { div#start_btn6 { font-size:1.1em; max-width: 320px;} } margin_bottom_5 { margin-bottom:5px; } margin_top_10 { margin-top:10px; }

* Returns as of February 17th, 2026

More reading

• These 3 TSX Stocks Have Delivered More Than 30 Years of Dividend Growth
• Got Patience? 3 Turnaround Growth Stocks for Steady Investors
• 2 Cheap Canadian Stocks to Pick Up Now
• Trump Tariffs: 3 TSX Stocks That Could Take a Beating
• TSX Today: What to Watch for in Stocks on Tuesday, February 17

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends Magna International. The Motley Fool has a disclosure policy.