Research Alert: CFRA Maintains Hold Rating On Shares Of Cae, Inc.
CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:We maintain our rating of Hold, based on significant restructuring of the business and a weak Civil segment that is working through headwinds. We lower our target price to CAD42 from CAD45 based on an EV/EBITDA multiple of 12.0x our FY 28 EBITDA. We have reduced Civil's revenue growth and curtailed consolidated margin expansion to ~15.0% by FY 28. We lower our FY 27 EPS estimate to CAD1.21 (down CAD0.09) and lower FY 28's to CAD1.39 from CAD1.52. The FY 30 transformation plan includes targets of CAD950M to CAD1B in adjusted segment operating income, mid-single-digit organic revenue growth, and cumulative 100% cash conversion over the four-year period. This came in below our estimates. For FY 27, management anticipates low-single-digit revenue growth, adjusted segment operating income margin of 14.6% to 15.1%, and adjusted EPS of CAD1.21 to CAD1.28. Valuation is historically depressed with a significant discount on a relative basis. While the new guidance is achievable, it is now up to management to execute.