Key Stats for CAE Stock
- Current Price: CA$32.01 (May 22, 2026)
- Full-Year Revenue: CA$4.9B, up 4% YoY
- Full-Year Adjusted EPS: CA$1.20
- Q4 Revenue: CA$1.3B, up 4% YoY
- Q4 Adjusted EPS: CA$0.42 (in-line with estimates)
- FY2027 Revenue Guidance: Low single-digit growth (Civil flat to slightly down; Defense mid-single-digit growth)
- FY2027 Adjusted EPS Guidance: CA$1.21 to CA$1.28
- TIKR Model Price Target: CA$62
- Implied Upside: ~94%
CAE Stock Beats Revenue Estimates but Drops 14% as FY2027 Reset Year Spooks the Market
CAE Inc. (CAE) reported Q4 fiscal 2026 revenue of CA$1.3B, beating Street estimates of CA$1.3B by 3%, while adjusted EPS of CA$0.42 landed exactly in line — yet CAE stock fell 13.6% on the print as management framed fiscal 2027 as an intentional reset year for a company undergoing its largest transformation in decades.
Full-year revenue reached CA$4.9B, up 4%, but full-year adjusted segment operating income declined to CA$710.7M from the prior year’s level, with Q4 adjusted segment operating income of CA$211.8M coming in well below the CA$258.8M delivered in the same quarter a year earlier.
The Civil segment bore the brunt of the pressure, with Q4 revenue of CA$746.7M rising just 3% and Q4 adjusted segment operating income dropping to CA$152.4M, driven by lower simulator utilization and mounting disruptions tied to the Middle East conflict.
Defense provided the counterweight, with Q4 revenue of CA$580M growing 6% and a Q4 operating margin of 10.2%, while the full-year Defense revenue climbed 9% to CA$2.2B with a full-year margin of 9.2%, according to Ryan McLeod, Chief Financial Officer, on the Q4 earnings call.
Matthew Bromberg, President and CEO, stated on the Q4 earnings call that “overall, strong Defense revenue and profit was tempered by a soft Civil market. In particular, events in the Middle East were challenging in Q4.”
On the Civil side, the full-year book-to-sales ratio landed at 0.96, meaning CAE entered fiscal 2027 with a backlog below parity — a direct headwind to near-term simulator production revenue — while Defense posted a Q4 book-to-sales of 1.11, confirming that the pipeline remains intact on that side of the business.
Management outlined a full transformation plan targeting CA$125M to CA$150M in annual run-rate cost savings by fiscal 2030, funded by CA$200M to CA$250M in one-time costs, with the majority of spending front-loaded into fiscal 2027 and benefits expected to materialize most meaningfully in fiscal 2028 and beyond.
TIKR’s CA$62 Target on CAE Stock Requires the Transformation to Deliver What FY2027 Cannot
TIKR’s mid-case values CAE stock at CA$62, implying approximately 94% total return from the current price of CA$32 over the next 6 years, at an annualized rate of 14% per year.
The model reaches CA$95 by March 2035 in the mid scenario, with a total return of 198% and a 13% IRR over the full forecast horizon.
The mid-case embeds a P/E multiple compression of 1.6% per year. TIKR’s model does not price in re-rating, which means the CA$62 target is built entirely on earnings growth, not on the market assigning a higher multiple to CAE stock as the transformation progresses.
That is a conservative framing: if Bromberg’s fiscal 2030 target of CA$950M to CA$1B in adjusted segment operating income is achieved and margins expand toward the levels McLeod described as “not achieved in this business,” the multiple compression assumption could prove too punitive.
The scenario where CAE stock reaches CA$75 with a 10.1% annual return is the world where the transformation executes cleanly but the Civil market remains subdued: Defense continues compounding at mid-single digits, cost savings arrive on schedule, and the Middle East disruption fades without a demand recovery in pilot training.
That return is meaningful at the current entry price but does not price in the margin expansion the management team has specifically identified.
The high case, at CA$118 with a 15.8% annual return, requires Defense to sustain the current demand cycle into a multi-year NATO spending ramp, Civil utilization to recover as the rationalized network right-sizes to actual demand, and roughly CA$125M to CA$150M in annualized savings to begin flowing through margins in fiscal 2028 and 2029 at the cadence McLeod outlined.
The 267% total return implied in that scenario is the payoff for investors willing to sit through a reset year while the company rebuilds its cost structure and backlog.
Should You Invest in CAE Inc.?
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