Scotiabank Lifts CAE Price Target to C$49 on $500M Flightscape Sale

CAE Inc.'s planned sale of its Flightscape airline operations software business to SITA has prompted Scotiabank to raise its price target on the company, citing proceeds that surpassed the bank's expectations and will significantly strengthen CAE's financial position.

Analyst Revision

In a note to clients, Scotiabank analyst Konark Gupta increased the price target on CAE to C$49 from C$48, while reiterating a Sector Outperform rating on the stock. The revision follows the announcement of the Flightscape sale, which carries an enterprise value of US$500 million.

The bank noted that the deal provides a major boost to CAE's asset sale program. Scotiabank now projects total net cash proceeds of C$730 million, or C$2.28 per share, a substantial increase from its previous estimate of C$200 million. This new forecast also assumes the potential divestiture of two additional assets.

Financial Implications

According to Scotiabank, the larger-than-anticipated proceeds will enhance CAE's balance sheet and provide greater flexibility for capital deployment. While the bank's fundamental outlook for the company remains largely unchanged, it now projects lower net debt following the transaction.

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CAE could allocate the proceeds toward several strategic initiatives, including:

• Further business investment
• Funding its ongoing transformation program
• Debt reduction

The increased cash position may also make it more likely for CAE to complete its existing normal course issuer bid (NCIB) for share buybacks, or potentially increase its limit or pursue a substantial issuer bid.

Company Outlook

Scotiabank stated it remains positive on CAE's multiyear outlook as the company progresses through a corporate transformation that began in late 2025. The program is on track for its expected completion by the middle of 2027.