2023-06-21 21:38:55
The record order for 500 A320 aircraft by Indian carrier IndiGo will have a positive impact for CAE. (Picture: courtesy)
What to do with securities from CAE, Element Solutions and Great-West Life? Here are some recommendations from analysts likely to move prices soon. Note: the author may have a totally different opinion from that expressed.
CAE (CAE, $28.77): Indian carrier IndiGo’s record order for 500 A320 aircraft will have a positive impact
On Monday, during the major aeronautical gathering at Le Bourget in Paris, the Airbus company announced that it had received an order for 500 aircraft from the A320 family from the Indian airline IndiGo. According to the press release, this is the largest order in commercial aviation history.
The value of the transaction will be over US$50 billion and deliveries will be staggered between 2030 and 2035. And it will have positive spinoffs for CAE, which already trains regarding half of the Indian carrier’s pilots through its IndiGo Cadet Pilot program, explains Benoit Poirier, analyst at Desjardins Securities. IndiGo holds around 55% of the Indian domestic market share, reports Aviation Week.
CAE can only be delighted with this partnership with IndiGo, because this order is revealing as to the outlook for the market, believes the analyst. The region stands out for its very large population, and the already high demand for air transport is only increasing, he explains. Airbus itself estimates that it is in India that the growth of air traffic will be strongest over the next few years. And since CAE provides both training and simulators, it gives it a unique competitive advantage in the region, the analyst believes.
Financially, a simulator worth 10 to 20 million US dollars (M$) per 30 aircraft will be required, which would represent revenues of US$200M for CAE if it obtains the entire order, estimates the analyst.
The announcement made at Le Bourget is positive and certainly strengthens his forecasts for CAE’s future cash flow growth, concludes the analyst. He recommends buying the stock for a target price of $36.00.
Element Solutions (ESI-NYSE, US$18.88): BMO begins coverage of the stock, giving it an “outperform” rating
1687385178
#Watch #CAE #Element #Solutions #GreatWest #Life
