Scotiabank Raises CAE Price Target to C$57, Maintains Outperform

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On January 21, Scotiabank raised its price target on CAE Inc. (NYSE:CAE) to C$57 from C$49 and maintained an Outperform rating, reflecting growing confidence in the company’s strategic transformation and margin recovery trajectory. The revision follows tangible evidence of operational improvement and balance sheet progress as CAE executes on restructuring initiatives.

In the third quarter, CAE Inc. (NYSE:CAE) reported revenue of C$1.25 billion compared to C$1.22 billion in the prior year. Management highlighted continued advancement of its transformation plan, including stronger cash flow generation and accelerated deleveraging ahead of schedule. While the Civil segment experienced year-over-year softness, the Defense division delivered a meaningful performance step-up, achieving an adjusted segment operating margin above 10% for the first time in over six years. The company completed a portfolio review identifying non-core assets representing approximately 8% of revenue and intends to pursue divestitures where value accretion is clear. Additionally, CAE plans to rationalize its commercial airline simulator fleet by removing roughly 10% of deployed units and reallocating others to improve utilization and returns. Although these measures may temper near-term revenue, they are expected to enhance long-term profitability, cash flow resilience, and return metrics, supporting a constructive investment outlook.

Founded in 1947 and headquartered in Montreal, CAE Inc. (NYSE:CAE) designs and manufactures simulation and training technologies for airlines, aircraft manufacturers, and defense customers worldwide.

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