CAE (CAE, Financial) has received an upgrade from CIBC analyst Kevin Chiang, who raised the stock's rating from Neutral to Outperformer. This change reflects increasing optimism about the company's prospects. Chiang also set a price target of C$44 for the stock, indicating potential for significant growth. Investors are taking note of this positive outlook as they assess the future performance of CAE.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 2 analysts, the average target price for CAE Inc (CAE, Financial) is $30.19 with a high estimate of $32.20 and a low estimate of $28.17. The average target implies an upside of 12.64% from the current price of $26.80. 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 $25.19, suggesting a downside of 6.01% from the current price of $26.8. 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: May 14, 2025
- Free Cash Flow (Q4): $289 million.
- Free Cash Flow (Full Year): $814 million.
- Cash Conversion Rate: 211%.
- New Orders (Q4): $1.3 billion.
- Adjusted Backlog: $20.1 billion, up 65% from last year.
- Civil Segment Operating Margin (Q4): 28.6%.
- Civil Segment Operating Margin (Full Year): 21.5%.
- Civil Backlog: $8.8 billion, up 37%.
- Defense Segment Operating Margin (Q4): 9.2%.
- Defense Segment Operating Margin (Full Year): 7.5%.
- Revenue (Q4): $1.3 billion, up 13% year-over-year.
- Adjusted Segment Operating Income (Q4): $258.8 million.
- EPS (Q4): $0.47 per share.
- Revenue (Full Year): $4.7 billion, up 10%.
- Adjusted Segment Operating Income (Full Year): $732 million, up 33%.
- Adjusted Net Income (Full Year): $385.5 million or $1.21 per share.
- Net Finance Expense (Q4): $56.5 million.
- Income Tax Expense (Q4): $45.2 million, effective tax rate of 25%.
- Net Cash from Operating Activities (Q4): $322.7 million.
- Net Cash from Operating Activities (Full Year): $896.5 million.
- Capital Expenditures (Q4): $109 million.
- Capital Expenditures (Full Year): $356.2 million.
- Net Debt: $3.2 billion, net debt to adjusted EBITDA of 2.77 times.
- Civil Revenue (Q4): $728.4 million, up 4% year-over-year.
- Civil Adjusted Segment Operating Income (Q4): $208.4 million.
- Defense Revenue (Q4): $547 million, up 29% year-over-year.
- Defense Adjusted Segment Operating Income (Q4): $50.4 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- CAE Inc (CAE, Financial) delivered an exceptional fourth quarter, generating $289 million in free cash flow and a record $814 million for the full year.
- The company secured $1.3 billion in new orders in the quarter, leading to a record end-of-year adjusted backlog of $20.1 billion, up 65% from last year.
- Civil segment achieved a record adjusted segment operating margin of 28.6% in Q4 and 21.5% for the year, with a 37% increase in backlog to $8.8 billion.
- Defense segment showed significant improvement with an adjusted segment operating income margin of 9.2% in the quarter and a near doubling of the adjusted defense backlog to $11.3 billion.
- CAE Inc (CAE) is well-positioned for long-term growth with strong fundamentals in both commercial and business aviation, supported by a robust order backlog and strategic expansion into new markets like air traffic controller training.
Negative Points
- Ongoing constraints in global aircraft supply and a temporary drop in US pilot hiring have impacted the Civil segment.
- Average training center utilization decreased to 75% in Q4 from 78% the prior year, mainly due to a reduction in pilot hiring in the Americas.
- Net finance expense increased to $56.5 million this quarter, up from $52.4 million in the fourth quarter of last year.
- The effective tax rate increased to 25% this quarter compared to 14% in the fourth quarter last year, impacting net income.
- The company expects modestly lower simulator deliveries in the first half of fiscal 2026 due to ongoing supply chain constraints affecting OEM aircraft output.
