CAE downgraded to Sector Perform from Outperform at Scotiabank

Scotiabank downgraded CAE to Sector Perform from Outperform with a price target of C$31, down from C$36.50. Shares have materially lagged the recent rally, notes the firm, which believes investors have recently grown concerned about the stock’s valuation in light of the ongoing delays in the defense segment’s margin recovery. While the firm remains of the view that the stock has upside in the long term and defense margins have potential to recover over the coming years, it doesn’t expect a strong catalyst in the near term, due mostly to reduced conviction in defense margins.