2023-11-15 22:22:39
CAE’s EBITDA was slightly lower than expected in the second quarter. (Photo: courtesy)
What to do with the securities of CAE, Alithya and Air Canada? Here are some analyst recommendations likely to move prices soon. Note: the author may have an opinion completely different from that expressed.
CAE (CAE, $29.04): mixed quarterly financial results
The manufacturer of flight simulators and training software for pilots and crews CAE revealed results above the forecasts of Cameron Doerksen of National Bank Financial (NBF), but mixed compared to the consensus of analysts.
Revenues totaled $1.09 billion (B) in the second quarter of fiscal 2024, ended September 30, while consensus and NBF anticipated $1.06 B and $1.03 B, respectively.
Adjusted earnings before interest and taxes (EBIT) reached 139 million dollars (M$), while the consensus anticipated a performance of 143 M$. Cameron Doerksen was a little more pessimistic at $123 million.
“Adjusted earnings per share were $0.27, compared to our expectation of $0.17 and analyst consensus of $0.20. The company specifies that a favorable tax rate had a beneficial effect of $0.05 on its earnings per share,” explains the analyst, adding that CAE’s order book reached $11.8 billion, a record.
He points out that the civil aviation sector recorded revenues of $573 million, up 13% year-on-year, while he forecast a figure of $512 million. The profit margin reached 20%, while we expected 18%,” writes Cameron Doerksen.
CAE delivered 11 flight simulators during the quarter and received orders for 15 aircraft (37 since the beginning of the fiscal year). In total, the civil sector order backlog increased to $5.9 billion, compared to $5.8 billion at the end of the first quarter.
“CAE took advantage of the unveiling of the second quarter results to raise its operating profit forecast for the entire financial year and expects growth of around 15% to 19% compared to the result of fiscal year 2023. The previous forecast was for an increase of 13% to 15%,” he says.
On the defense and security side, CAE recorded revenues of $477 million, while the analyst anticipated $469 million. The profit margin, however, was 4.5%, one percentage point lower than the FBN forecast. “For 2024, CAE wishes to replenish its order book and make progress in concluding its contracts with lower margins. The company expects margins to remain in the mid-single digit range for the remainder of the fiscal year and speaks of a “positive inflection” occurring during its 2025 fiscal year,” the analyst said.
Cameron Doerksen maintains his “outperform” recommendation on CAE stock, but slightly reduces his one-year target price from $38 to $36 to reflect the slower-than-expected recovery in the defense and security sector. Security.
Alithya (ALYA, $1.17): a second quarter more difficult than expected
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