Analyst Fadi Chamoun of BMO Capital maintained a Buy rating on CAE (CAE – Research Report), retaining the price target of C$39.00.
Fadi Chamoun has given his Buy rating due to a combination of factors that highlight CAE’s strong position in both the Civil Aviation and Defense markets. The company has demonstrated healthy fundamentals, with an expected organic growth rate in the Civil segment projected to reach around 8.5% by the end of fiscal year 2025. This growth is supported by a constructive outlook for the business aviation market, increasing demand for training services, and a strategic redeployment of Full-Flight Simulators (FFS) to enhance utilization.
In the Defense segment, CAE is experiencing strong order momentum, particularly with the ramp-up of the FACT contract, which is expected to drive revenue growth beyond the consensus estimates. The winding down of legacy contracts is anticipated to improve margins, and there is potential for further margin expansion given the upward pressures on defense budgets globally. These factors, combined with the company’s strategic acquisitions, are expected to bolster earnings, free cash flow, and return on invested capital, justifying the Buy rating.
In another report released on March 11, RBC Capital also reiterated a Buy rating on the stock with a C$43.00 price target.
Based on the recent corporate insider activity of 39 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of CAE in relation to earlier this year.