CAE Inc. (CAE.TO) was upgraded to Outperformer from Neutral at CIBC Capital Markets.
Analyst Kevin Chiang raised his price target on shares of the Montreal-based simulation technology and aviation training company to $44 from $38.
Chiang said that the announced appointment of Matthew Bromberg as CEO effective August 13, and Calin Rovinescu will be Executive Chairman of the Board, has investors asking about the implications of executive changes for CAE's medium- to long-term growth.
"We expect CAE will provide more granular detail around the drivers of its long-term earnings outlook after Mr. Bromberg and Mr. Rovinescu have settled into their roles," the analyst said in a note to clients.
"...We take a high-level approach to determine what CAE's earnings potential could be over the next three years," Chiang said. "Given our increasing optimism that CAE can drive outsized EPS growth and valuation upside, we raise our target multiple to 12.5x (from 11.5x) with our price target increasing to $44 from $38."
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