Heat your oven to 300°F. Season the beef with salt and pepper to enhance the flavor before setting it aside.
In a large Dutch oven, add the diced bacon and cook over medium heat until crispy. Once done, transfer the bacon to a plate and leave the rendered fat in the pot.
Increase the heat to medium-high. Sear the beef in batches in the bacon fat until nicely browned on all sides, then return browned beef to the plate with bacon.
In the same pot, add the olive oil if necessary and sauté the carrots and onion until softened, about 6–8 minutes. Stir in the thyme and cook for an additional minute.
Add the minced garlic and tomato paste, letting them cook together for a minute to release their flavors.
Sprinkle the flour over the vegetable mixture and stir well to incorporate everything. Then, gradually pour in the red wine, scraping the bottom of the pot to lift any browned bits.
Next, pour in the beef stock, add the bay leaf, followed by the beef and bacon. Bring to a gentle simmer.
Cover the Dutch oven and transfer it to the oven. Let it cook for about 2.5 hours or until the beef is fork-tender.
While the stew is finishing, sauté the pearl onions and mushrooms in a bit of olive oil in a separate pan until they are golden brown and tender. Season them lightly with salt and pepper.
After the stew has cooked, add the sautéed onions and mushrooms to the pot. Remove the lid and let it bake for an additional 20-30 minutes, allowing the sauce to reduce slightly.
Finally, discard the bay leaf, taste, and adjust seasoning. Serve hot, garnished with parsley and a sprinkle of orange zest for a fresh finish.