CAE Inc (TSE:CAE)
TSX:CAE
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CAE
(TSX:CAE)
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Rating:63Neutral
Price Target:
C$39.00
▲(9.83% Upside)
Action:ReiteratedDate:03/26/26
The score is driven by improving financial performance and a constructive earnings update (strong cash flow, faster deleveraging, and accelerating Defense profitability), partially offset by weak technical momentum (price below key moving averages with negative MACD) and a relatively high P/E with no dividend yield provided.
Positive Factors
Defense segment momentum and contract wins
Sustained Defense outperformance reflects multi‑year contracts, higher recurring services content and improving margins. Strong Defence momentum and bookings diversify revenue away from cyclical Civil demand, supporting more predictable long‑term revenue and margin expansion.
Negative Factors
Civil segment softness and utilization decline
Civil weakness is a structural risk because the Civil business is a large revenue component tied to airline activity and simulator sales. Lower utilization and fewer deliveries can persist through airline capacity cycles, reducing recurring training revenue and pressuring segment margins.
Read all positive and negative factors
Positive Factors
Negative Factors
Defense segment momentum and contract wins
Sustained Defense outperformance reflects multi‑year contracts, higher recurring services content and improving margins. Strong Defence momentum and bookings diversify revenue away from cyclical Civil demand, supporting more predictable long‑term revenue and margin expansion.
Read all positive factors
CAE (CAE) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$11.66B
Dividend YieldN/A
Average Volume (3M)1.06M
Price to Earnings (P/E)30.7
Beta (1Y)1.11
Revenue Growth9.12%
EPS GrowthN/A
CountryCA
Employees13,000
SectorIndustrials
Sector Strength72
IndustryAerospace & Defense
Share Statistics
EPS (TTM)0.34
Shares Outstanding321,805,270
10 Day Avg. Volume1,027,430
30 Day Avg. Volume1,055,200
Financial Highlights & Ratios
PEG Ratio-0.12
Price to Book (P/B)2.31
Price to Sales (P/S)2.40
P/FCF Ratio24.95
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$49.21Price Target Upside38.59% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering10
EPS Forecast (FY)1.28
Revenue Forecast (FY)C$4.91B
CAE Business Overview & Revenue Model
Company Description
CAE Inc., together with its subsidiaries, provides simulation training and critical operations support solutions worldwide. It operates through three segments: Civil Aviation, Defense and Security, and Healthcare. The Civil Aviation segment provid...
How the Company Makes Money
CAE makes money primarily by selling and servicing simulation and training solutions across its main markets (civil aviation and defense). Key revenue streams include: (1) Training services revenue from delivering recurring pilot/crew and mission ...
CAE Earnings Call Summary
Earnings Call Date:Feb 12, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Jun 02, 2026
Earnings Call Sentiment Positive
The call conveyed a constructive, action-oriented tone: CAE reported modest consolidated revenue and operating income growth, materially strengthened its balance sheet (net debt/EBITDA 2.3x), delivered strong free cash flow, and showed a powerful Defense performance with meaningful contract wins. Management launched a committed transformation plan (portfolio sharpening, capital discipline, performance improvement) that already yielded early cash and leverage benefits. However, Civil softness (reduced simulator deliveries, lower utilization) and planned network rationalization introduce near-term revenue headwinds and transformation-related costs, with some milestones and targets deferred until the year-end update. Overall the positive cash flow, deleveraging success, Defense momentum and clear, disciplined plan outweighed the Civil challenges and execution risks in the near term.Positive Updates
Consolidated Revenue and EPS Growth
Q3 consolidated revenue of $1.25 billion, up 2% year-over-year; adjusted EPS of $0.34 versus $0.29 a year ago (increase of ~17%).
Negative Updates
Civil Segment Weakness
Civil revenue declined 5% year-over-year to $717.2 million; Civil adjusted operating income decreased 6% to $141.8 million with a margin of 19.8%. Drivers include lower simulator sales and lower training center utilization.
Read all updates
Q3-2026 Updates
Positive
Negative
Consolidated Revenue and EPS Growth
Q3 consolidated revenue of $1.25 billion, up 2% year-over-year; adjusted EPS of $0.34 versus $0.29 a year ago (increase of ~17%).
Read all positive updates
Company Guidance
CAE issued detailed near‑term guidance and transformation metrics: Q3 consolidated revenue was $1.25B (+2% YoY), adjusted segment operating income $195.8M (+3%), adjusted EPS $0.34 (vs $0.29), net cash from operations $407.6M and free cash flow $411.3M; Q3 CapEx was $50.6M (≈75% invested in growth) and full‑year CapEx is now expected to be >10% lower YoY with Civil CapEx ~30% lower; net debt stood at ≈$2.8B (net debt/adjusted EBITDA 2.3x, ahead of the 2.5x target); Q3 tax expense $29.6M (effective rate 21%) with an expected run‑rate rate of ~25%; the quarter included $7.3M of transformation‑related costs (reducing adjusted EPS by ~$0.02, $4.9M in Civil, $2.4M in Defense); Civil revenue was $717.2M (‑5%) with adj. operating income $141.8M (‑6%, margin 19.8%), 71% training center utilization (vs 76%) and 15 full‑flight simulators delivered (vs 20); Defense revenue was $534.9M (+14%) with adj. operating income $54M (+38%, margin 10.1%) and management now expects Defense adj. operating income to grow >20% YoY with an annual margin of ~8.5%; the company identified ~8% of revenue as non‑core, operates 373 full‑flight simulators globally (250 commercial) and plans to move ~10% of commercial simulators (~25 devices) over a 12–24 month network rationalization, with more specific targets and FY2027 outlook to be provided at year‑end in May.CAE Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
63
Positive
Cash Flow
57
Neutral
| Breakdown | TTM | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 4.86B | 4.71B | 4.28B | 4.01B | 3.37B | 2.98B |
| Gross Profit | 1.38B | 1.30B | 1.15B | 1.08B | 955.50M | 765.00M |
| EBITDA | 1.06B | 915.70M | 785.70M | 693.60M | 552.30M | 446.90M |
| Net Income | 375.90M | 405.30M | -304.00M | 222.70M | 141.70M | -47.20M |
Balance Sheet | ||||||
| Total Assets | 11.03B | 11.21B | 9.83B | 10.44B | 9.58B | 8.75B |
| Cash, Cash Equivalents and Short-Term Investments | 463.70M | 293.70M | 160.10M | 217.60M | 346.10M | 926.10M |
| Total Debt | 3.25B | 3.47B | 3.07B | 3.49B | 3.05B | 2.35B |
| Total Liabilities | 5.78B | 6.24B | 5.53B | 5.85B | 5.49B | 5.54B |
| Stockholders Equity | 5.17B | 4.89B | 4.22B | 4.51B | 4.01B | 3.14B |
Cash Flow | ||||||
| Free Cash Flow | 496.44M | 452.40M | 126.30M | -16.90M | 55.40M | 203.00M |
| Operating Cash Flow | 878.63M | 896.50M | 566.90M | 408.40M | 418.20M | 366.60M |
| Investing Cash Flow | -377.90M | -732.30M | -215.40M | -400.70M | -2.24B | -343.40M |
| Financing Cash Flow | -344.37M | -49.80M | -395.30M | -152.60M | 1.26B | -21.30M |
CAE Technical Analysis
Negative
35.51
Price Trends
40.94
Negative
40.57
Negative
39.62
Negative
Market Momentum
-1.40
Positive
36.10
Neutral
18.55
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CAE, the sentiment is Negative. The current price of 35.51 is below the 20-day moving average (MA) of 38.01, below the 50-day MA of 40.94, and below the 200-day MA of 39.62, indicating a bearish trend. The MACD of -1.40 indicates Positive momentum. The RSI at 36.10 is Neutral, neither overbought nor oversold. The STOCH value of 18.55 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:CAE.
CAE Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | C$468.98M | 21.66 | 14.42% | ― | 15.09% | 31.55% | |
71 Outperform | C$4.46B | 30.51 | 8.88% | ― | 57.77% | 57.55% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
63 Neutral | C$11.66B | 30.69 | 7.50% | ― | 9.12% | ― | |
62 Neutral | C$1.20B | 26.82 | 5.52% | 0.93% | 8.84% | 131.58% | |
61 Neutral | C$24.32B | 18.12 | -61.55% | ― | 6.60% | -1.71% | |
60 Neutral | C$24.32B | 18.12 | -61.55% | ― | 6.60% | -1.71% |
* Industrials Sector Average
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CAE
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1.03
2.93%
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CAE Corporate Events
Business Operations and StrategyFinancial DisclosuresM&A Transactions
CAE advances transformation as Defense strength offsets Civil softness in Q3
Neutral
Feb 12, 2026
CAE reported third quarter fiscal 2026 revenue of $1.25 billion, up 2% year over year, while earnings per share declined to $0.34 from $0.53 as last year’s results benefited from a significant one-time gain. Adjusted EPS rose 17% to $0.34, n...
Business Operations and StrategyExecutive/Board Changes
CAE names former ATS finance chief Ryan McLeod as new CFO
Positive
Jan 19, 2026
CAE Inc. has appointed Ryan McLeod as Chief Financial Officer, effective February 23, 2026, following a comprehensive search process and an interim period under CFO Constantino Malatesta. McLeod, who brings extensive experience from his tenure as ...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.