Should you sell your CAE stock?

As reported by the Globe and Mail, RBC analyst James McGarragle has lowered his price target on CAE (CAE Stock Quote, Chart, News, Analysts, Financials TSX:CAE) from $41.00 to $40.00. He maintained his “Sector Perform” rating on the stock.

“CAE reported an FQ2 beat,” McGarragle wrote. “That said, the company lowered Civil guidance (although consistent with pilot hiring trends), and reiterated Defense guidance despite the strong H1 (H1 adj. SOI up more than 40 per cent), which implies negative adj. SOI growth in H2. All that to say, we continue to see CAE as exposed to some very positive long-term secular trends. However, the company is working through some near-term headwinds in Civil and with guidance implying negative growth in Defense for the next two quarters, we see the shares yielding less than 3 per cent on our FY27 FCF estimate as fully valued.”

On November 11, CAE reported its Q2, 2026 results. The company posted Adjusted EPS of $0.23 (down from $0.24 year-over-year) on revenue of $1.24-billion (up from $1.14-billion year-over-year).

“In my first few months as CEO, I’ve gained a deep appreciation for CAE’s extraordinary people, our strong customer relevancy, our industry-leading technology, and strong market positions,” CEO Matthew Bromberg said. “Combined, this has enabled incredible growth and I see opportunity for significant continued growth. However, it is time to balance growth with asset and operational efficiency. To that end, we have launched a transformation plan to sharpen our portfolio, strengthen capital discipline, and elevate performance, including a focus on cost transformation. These three priorities will guide how we operate, invest, and create long-term value. With generational defence investments planned in the United States, Canada and Europe, strong structural demand and record aircraft backlogs in civil aviation, CAE is well positioned to drive higher returns, stronger cash flow, and sustainable value for shareholders. Both Civil and Defense performed broadly as expected this quarter, and we remain focused on disciplined execution while advancing the transformation that will define our next chapter.”