BofA Upgrades CAE Stock to Neutral, Raises Price Target to $32

On Friday, BofA Securities analyst Donald Epstein upgraded shares of CAE Inc. (TSX: CAE) to neutral and raised his price target to $32 from $19. The move follows a series of management and operational changes at CAE, including a leadership transition and more cautious capital spending.

CAE Inc. (NYSE: CAE), known for its simulation technology and training services, has made significant strides in addressing previous challenges. Epstein said CAE has already managed to cut $570 million from its defense business and overcome pilot recruitment challenges in the U.S. due to aircraft OEM production constraints. The company has also optimized resources, reduced costs and demonstrated its ability to exit underperforming contracts. These changes, along with key management changes such as the replacement of the CEO and CFO and the appointment of a new COO, have improved the company’s outlook.

In terms of tariff-related risks, Epstein believes that CAE is relatively immune due to the local nature of its services and the low import of simulation materials. The company’s defense business is also showing signs of recovery after restructuring, with positive growth forecasts and expectations of higher margins for fiscal 2025.

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With positive developments at CAE, this could be a good time for investors to keep a close eye on the stock.