CAE upgraded to Outperform from Sector Perform at Scotiabank

Scotiabank upgraded CAE (CAE) to Outperform from Sector Perform with a price target of C$42, up from C$40. The firm says this is a fundamental call, not a valuation call, but notes the stock’s risk/reward has improved following the 12% selloff since the mid-February peak. CAE’s defense margin execution has improved faster than expected and its leverage ratio has normalized, aided by stronger free cash flow conversion, the analyst tells investors in a research note. Scotiabank believes the company “has essentially hit the reset button on most aspects and the base is ready for a refreshed leadership team to take CAE to new heights.”