CAE Price Target Raised to C$57 as Defense Margin Tops 10%
Scotiabank raised CAE’s price target to C$57 from C$49, maintained an Outperform rating, and saw Q3 revenue hit C$1.25 billion while Defense achieved a 10% operating margin. The company will divest 8% of revenue from non-core assets and cut 10% of its simulator fleet to focus on deleveraging and cash-flow improvement.
1. Scotiabank Raises Price Target
Scotiabank lifted its price target on CAE to C$57 from C$49 and maintained an Outperform rating, highlighting growing confidence in the company’s strategic transformation and margin recovery trajectory.
2. Q3 Financial Performance
CAE reported Q3 revenue of C$1.25 billion versus C$1.22 billion a year earlier, with its Defense division posting a 10% operating margin for the first time in six years, offsetting softness in the Civil segment.
3. Restructuring and Divestiture Plans
Management completed a portfolio review identifying non-core assets representing about 8% of revenue for potential divestiture and plans to rationalize 10% of its commercial simulator fleet to accelerate deleveraging and cash-flow improvement.
4. Peer Valuation Comparison
A recent analysis evaluates CAE’s valuation against AeroVironment, examining relative growth prospects, margin trajectories and upside potential for value-oriented investors.