The transformation plan's $125-150M annual savings target by FY2030 provides a medium-term catalyst, but near-term Civil Aviation weakness (12% adjusted segment income decline) and elevated restructuring costs ($84.4M) weigh on sentiment. Watch for Q1 FY2027 operating metrics to gauge whether Defense momentum can offset Civil headwinds. The improved credit profile (S&P stable outlook, net debt-to-capital down to 33.2%) supports deleveraging narrative.
Price Chart
Executive Summary
CAE reported fiscal 2026 annual revenue of $4.914B (+4% YoY) but net income fell 23% to $313.1M ($0.98 EPS) due to a $84.4M transformation plan charge including $58.9M in asset impairments. Civil Aviation adjusted segment operating income declined 12% to $510.5M on lower training utilization, while Defense & Security grew 33% to $200.2M on program ramp-ups. Net debt improved to $2.68B (33.2% debt-to-capital vs 39.0% last year), and S&P revised outlook to stable. The transformation plan targets $125-150M in annual savings by FY2030.
Key Facts
- FY2026 revenue $4.914B vs $4.708B (+4% YoY)
- Net income $313.1M vs $405.3M (-23% YoY), EPS $0.98 vs $1.27
- Civil Aviation adjusted segment operating income $510.5M vs $581.5M (-12% YoY)
- Defense & Security adjusted segment operating income $200.2M vs $150.5M (+33% YoY)
- Transformation plan charge of $84.4M in Q4, including $58.9M asset impairments
- Net debt reduced to $2.68B from $3.18B; net debt-to-capital 33.2% vs 39.0%
- S&P revised outlook to stable from negative on March 17, 2026
- Free cash flow $473.8M vs $474.9M (flat YoY)
- Adjusted backlog $19.26B vs $20.14B (-4% YoY)
- Book-to-sales ratio 1.02x for trailing 12 months
Financial Impact
Revenue grew 4% but net income fell 23% due to $84.4M restructuring. Civil Aviation margins compressed. Defense margins improved. Net debt down $495M.
Risk Factors
- Transformation plan execution risk: $200-250M total cost over FY2026-2027 may pressure near-term margins
- Civil Aviation utilization decline (70% vs 74% last year) signals demand softness in business training
- Geopolitical/tariff uncertainty could disrupt supply chain and defense program timing
- Legacy defense contracts still pose execution risk though management deems impact no longer material
- Foreign exchange volatility (USD weakened 3%, EUR strengthened 4% vs CAD) creates translational noise
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 2 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 6-K Filing (Primary) | 0001173382-26-000012 |
| Document: cae_033126xex3mda.htm | 0001173382-26-000012 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Aug 13, 2026 7w ago | 6-K | $26.33 $23.98 | ▼ −8.93% | ▼ −7.18% | $24.00 (−8.83%) |
Jul 10, 2026 12w ago | Press Release | $25.62 $27.19 | ▲ +6.13% | ▲ +3.70% | $24.00 (−6.30%) |
Jun 5, 2026 17w ago | 6-K | $25.50 $26.67 | ▲ +4.59% | ▲ +2.73% | $24.00 (−5.86%) |
May 21, 2026 19w ago | 6-K | $23.16 $24.73 | ▲ +6.77% | ▲ +8.19% | $24.00 (+3.65%) |
May 21, 2026 19w ago | 6-K | $26.94 $24.91 | ▼ −7.54% | ▼ −7.87% | $24.00 (−10.89%) |
US Market Status
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