CAE partners with Canada for fighter pilot training

MONTREAL - CAE Inc . (NYSE: NYSE:CAE) (TSX: CAE (TSX:CAE)), a global leader in simulation and training for aviation with a market capitalization of $7.55 billion, has been selected by the Government of Canada as a strategic partner to develop the Future Fighter Lead-in Training (FFLIT) program for the Royal Canadian Air Force (RCAF). The program aims to prepare pilots for the advanced CF-35A fighters. According to InvestingPro data, CAE has shown strong momentum with a 44.6% price return over the past six months, with several more positive indicators available to subscribers.

Announced today, the collaboration between CAE and the RCAF will leverage CAE’s expertise to accelerate the initial operational capability of the FFLIT program. The initiative is designed to enhance the long-term success of Canada’s CF-35A capabilities through continuous, technologically advanced training methodologies.

CAE’s President and CEO, Marc Parent, expressed the company’s honor in being entrusted by the Government of Canada to play a pivotal role in advancing the RCAF’s 5th Generation fighter capabilities. France Hébert, Vice President and General Manager of CAE Defence & Security Canada, echoed this sentiment, emphasizing the importance of providing top-tier training for the next generation of RCAF pilots within Canada.

The Honourable Jean-Yves Duclos, Minister of Public Services and Procurement and Quebec Lieutenant, highlighted the announcement as a testament to Canada’s commitment to building the RCAF’s long-term capacity and contributing to national security and economic growth.

CAE, one of Canada’s largest defence contractors, has a history of delivering defence capabilities, including NATO Flying Training in Canada. In May 2024, CAE’s joint venture SkyAlyne was awarded a C$11.2 billion contract for the Future Aircrew Training (FAcT) Program, consolidating three aircrew training operations. Following this, in October 2024, CAE secured a $1.7 billion sub-contract from SkyAlyne to provide modern pilot training to the RCAF. The company’s revenue grew by 4.7% in the last twelve months, and analysts expect profitability improvements in the coming year, as revealed by InvestingPro’s comprehensive financial analysis.

The company’s network spans 240 sites in 40 countries, offering a range of training solutions across various platforms. This partnership is expected to further CAE’s legacy of expertise in civil aviation and military training. With its earnings report due on February 13, 2025, investors can access detailed analysis and Fair Value estimates through InvestingPro’s exclusive Research Report, which provides comprehensive insights into CAE’s financial health and growth prospects.

This news is based on a press release statement from CAE Inc.

In other recent news, CAE Inc., a global leader in simulation technologies and training services, has seen a flurry of activity in the financial sector. The company has reported a robust performance in its second quarter, with an 8% year-over-year increase in consolidated revenue, reaching $1.14 billion, and an adjusted operating income of $149 million. In addition, CAE announced a record $18 billion adjusted backlog, a 50% increase from the previous year.

In terms of analyst activity, RBC Capital Markets has raised its price target on CAE’s shares to Cdn$38.00, while maintaining an Outperform rating. Similarly, BMO Capital Markets has also raised its price target to Cdn$38.00, citing CAE’s strong position in the civil aviation training market.

However, TD Securities has downgraded the stock rating from Buy to Hold, despite increasing the price target to C$35.00. This decision was attributed to the stock’s significant appreciation in value. On a similar note, a CIBC (TSX:CM) analyst moved the company’s rating from Outperformer to Neutral, maintaining a price target of Cdn$33.00, citing the stock’s recent outperformance.

These recent developments suggest a mixed outlook from analysts, with an emphasis on the company’s strong performance and potential for growth, balanced by caution due to the stock’s recent appreciation.

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