This analyst just raised his price target on CAE

Desjardins Securities analyst Benoit Poirier has become a little more bullish on CAE (CAE Stock Quote, Chart, News, Analysts, Financials TSX:CAE) following its third-quarter fiscal 2026 results, raising his target price to $52.00 from $51.00 and reiterating a “Buy” rating, as he looks past what he expects will be a transitional FY27 and toward longer-term margin expansion, portfolio optimization and balance sheet improvement.

Montreal-based CAE, founded in 1947, manufactures simulation technologies and provides modelling and training services for the aviation, defence and healthcare markets.

“While we expect noise in the short term (FY27 to be a transition year) as management is taking actions to reshape CAE’s long-term trajectory (8% of revenue considered non-core, 10% reduction of deployed commercial capacity), we expect investors to look forward and focus on long-term upside, with full details of the transformation plan to be released in early May,” Poirier said. “We made several adjustments/assumptions to our forecasts. We are confident the shares could be worth $60+ in the next 3–4 years.”

In Feb. 12, CAE reported third-quarter fiscal 2026 revenue of $1,252.1-million, up from $1,223.4-million a year earlier. EPS was $0.34 compared to $0.53 last year, while Adjusted EPS was $0.34 versus $0.29, including approximately $0.02 of transformation-related expenses.

Operating income was $195.8-million, or 15.6% of revenue, compared to $262.6-million, or 21.5%, in the prior year, which included a $72.6-million gain related to the fair value remeasurement of SIMCOM. Adjusted segment operating income rose to $195.8-million, or 15.6% of revenue, from $190.0-million, or 15.5%, last year.

Net debt-to-Adjusted EBITDA was 2.30x, ahead of management’s fiscal year-end target of 2.50x.

“This quarter reflects continued progress as we embark on the various stages of our transformation plan,” said president and CEO Matthew Bromberg. “While we faced lower year-over-year performance in Civil, we generated strong cash flow, exceeded our deleveraging target ahead of schedule, and delivered a meaningful step-up in Defence performance, including achieving an adjusted segment operating income margin above 10% for the first time in over six years.”

Bromberg said CAE has completed a portfolio review and identified non-core assets representing approximately 8% of revenue and will pursue divestitures where appropriate. The company also plans to remove roughly 10% of deployed commercial airline simulators and relocate additional devices to improve utilization and returns, actions that may weigh on near-term revenue but are expected to enhance long-term resilience.

Management expects to provide longer-range financial targets when it reports fiscal year-end results in May.

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