This Canadian aerospace stock is a buy, TD says

In a March 31 note, TD Cowen analyst Tim James maintained his “Buy” rating on Magellan Aerospace (Magellan Aerospace Stock Quote, Chart, News, Analysts, Financials TSX:MAL) and raised his target price to $25.00 from $24.00 after what he described as a strong fourth quarter, with most key metrics coming in ahead of his forecast.

As reported by the Globe and Mail, James said Magellan remains “a diversified aerospace investment opportunity with a strong balance sheet, industry tailwinds, attractive valuation and an increasing net cash position capable of providing incremental M&A-driven growth.”

Magellan reported fourth-quarter 2025 revenue of $278-million, up 16% year over year and ahead of James’s $268-million estimate. Earnings per share, excluding a remediation provision, rose 27% to $0.35, above his $0.30 forecast. James said the quarter showed accelerating revenue and earnings growth, as well as the highest EBITDA margin, excluding non-recurring items, since 2020.

He said the outlook is encouraging across both the civil and defence businesses, with supply chain and inflation pressures remaining the main items to watch. Magellan said commercial aerospace conditions continue to improve as Airbus and Boeing deliveries recover, although raw material constraints, skilled labour shortages and tariff-related uncertainty still pose risks. On the defence side, the company said demand remains strong amid higher global military spending and ongoing fleet modernization.

James said he expects EBITDA to grow 24% in 2026 and another 10% in 2027, with earnings per share reaching $1.66 in 2027. He argued Magellan’s discount to peers remains too wide and said improving OEM supply chains, a stronger commercial cycle, solid defence demand, dividend upside, M&A optionality and the company’s balance sheet should help narrow that gap over time.

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