CAE, the Industrials sector company, was revisited by a Wall Street analyst today. Analyst Ronald Epstein from Bank of America Securities reiterated a Hold rating on the stock and has a C$40.00 price target.
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Ronald Epstein has given his Hold rating due to a combination of factors affecting CAE’s performance. The company started FY2026 with mixed results, particularly in its Civil Aviation segment, which experienced muted revenue growth and weaker simulator utilization. Additionally, the pilot hiring environment has been sluggish, impacting the overall results. Despite these challenges, there was a positive note with an 11% year-over-year growth in Civil’s services revenue, likely driven by sustained demand for business jet training.
In the Defense segment, while revenue growth was light, margins showed improvement, which is a positive sign. However, the uncertainty in Civil demand and the timing of new pilot hires remain concerns. As a result, Epstein has lowered the earnings per share estimates for FY2026, reflecting these uncertainties. The unchanged price objective of C$40 is based on a relative valuation, indicating a balanced view of risks and opportunities. The recent leadership changes, with a new CEO and Chairman, are seen favorably, but the overall outlook remains cautious.
Epstein covers the Industrials sector, focusing on stocks such as Boeing, RTX, and BWX Technologies. According to TipRanks, Epstein has an average return of 17.1% and a 65.38% success rate on recommended stocks.
In another report released on August 13, RBC Capital also maintained a Hold rating on the stock with a C$41.00 price target.