Scotiabank analyst Konark Gupta has upgraded the rating for CAE (CAE, Financial) from Sector Perform to Outperform. The analyst has set a price target of C$42 for the company. This upgrade reflects an optimistic outlook on CAE's future performance, indicating a potential for favorable returns for investors.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 3 analysts, the average target price for CAE Inc (CAE, Financial) is $26.34 with a high estimate of $32.00 and a low estimate of $19.00. The average target implies an upside of 7.19% from the current price of $24.57. More detailed estimate data can be found on the CAE Inc (CAE) Forecast page.
Based on the consensus recommendation from 8 brokerage firms, CAE Inc's (CAE, Financial) average brokerage recommendation is currently 2.5, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for CAE Inc (CAE, Financial) in one year is $24.99, suggesting a upside of 1.71% from the current price of $24.57. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the CAE Inc (CAE) Summary page.
CAE Key Business Developments
Release Date: February 14, 2025
- Free Cash Flow: Record $410 million in Q3.
- New Orders: $2.2 billion in Q3, leading to a record adjusted backlog of $20.3 billion.
- Civil Orders: $1.5 billion, with a 2 times book-to-sales ratio.
- Civil Revenue: $752.6 million, up 21% year-over-year.
- Civil Adjusted Backlog: $8.8 billion, up 44% year-over-year.
- Defense Orders: $707 million, with a book-to-sales ratio of 1.50 times.
- Defense Adjusted Backlog: $11.5 billion, up 104% year-over-year.
- Consolidated Revenue: $1.22 billion, up 12% year-over-year.
- Adjusted Segment Operating Income: $190 million, up 31% year-over-year.
- Adjusted EPS: $0.29, compared to $0.24 in the previous year.
- Net Finance Expense: $56.6 million, up from $52.4 million in the previous year.
- Income Tax Expense: $34.8 million, with an effective tax rate of 17%.
- Net Cash from Operating Activities: $424.6 million, up from $220.8 million in the previous year.
- Capital Expenditures: $97.6 million, with 80% invested in growth.
- Net Debt: Approximately $3.4 billion, with a net debt to adjusted EBITDA of 3.36 times.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- CAE Inc (CAE, Financial) reported a record $410 million in free cash flow for the third quarter.
- The company secured $2.2 billion in new orders, resulting in a record adjusted backlog of $20.3 billion.
- Civil aviation segment saw a 21% year-over-year revenue growth, with a record $8.8 billion total civil adjusted backlog.
- Defense segment achieved a book-to-sales ratio of 1.50 times, contributing to a record $11.5 billion in Defense adjusted backlog.
- Strong cash flow performance with net cash from operating activities reaching $424.6 million, significantly higher than the previous year.
Negative Points
- Some softness in commercial aviation training in the Americas due to ongoing aircraft supply chain challenges.
- Pilot hiring remained modest in the Americas, affecting training center utilization.
- Higher finance expenses due to increased lease liabilities and additional borrowings for the SIMCOM transaction.
- Annual Civil adjusted segment operating income growth is expected to be modestly below previous outlook due to delayed aircraft deliveries.
- Net debt to adjusted EBITDA remains relatively high at 3.36 times, though expected to decrease by fiscal year-end.
