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Investing.com - BMO Capital maintained its Outperform rating and Cdn$50.00 price target on CAE Inc. (TSX:CAE) (NYSE:CAE) on Wednesday. According to InvestingPro data, CAE currently trades at a P/E ratio of 30.6x and has demonstrated strong momentum with a 47% return over the past year.
The research firm expressed continued confidence in CAE’s Civil and Defense segments, citing robust demand fundamentals and potential for self-improvement initiatives to drive performance. The company’s revenue grew 9% in the last twelve months, with a healthy gross profit margin of 28%.
BMO Capital highlighted that CAE’s strategic focus on core competencies, improved asset utilization, disciplined capital allocation, and reduced leverage would support strong earnings per share, free cash flow, and return on invested capital improvements over the next three to five years.
The firm noted an upside potential to Cdn$65-$70 based on fiscal 2030 estimates, representing significant growth opportunity beyond the current Cdn$50 price target.
BMO Capital did moderate its near-term assumptions for CAE’s Civil segment to account for ongoing softness in commercial pilot training, though it characterized these challenges as "largely transitory" rather than structural concerns.
In other recent news, CAE Inc. reported its first-quarter earnings for fiscal year 2026, which showed a slight beat on earnings per share (EPS) but a miss on revenue. The company posted an EPS of $0.21, exceeding the forecast of $0.20, while revenue reached $1.1 billion, falling short of the anticipated $1.12 billion. In a separate development, TD Securities upgraded CAE’s stock rating from Hold to Buy, citing progress in the company’s defense margins as a positive sign. The firm also highlighted constructive industry trends and management’s focus on free cash flow and return on capital as reasons for the upgrade. Additionally, CAE announced the final election results for its board of directors, with all 13 nominees successfully elected. Notably, Matthew Bromberg received the highest level of shareholder support at 99.95%. Meanwhile, Patrick Shanahan and Louis Têtu received the lowest approval rates, both over 91%. These recent developments provide a snapshot of CAE’s current business landscape.
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