CAE’s Flightscape sale prompts Scotiabank to raise price target

CAE’s planned US$500 million sale of its Flightscape airline operations software business to SITA has exceeded Scotiabank’s expectations, strengthening the Canadian aviation technology company’s balance sheet and giving it greater flexibility to deploy capital.

Scotiabank raised its price target on CAE to C$49 from C$48 while maintaining its Sector Outperform rating, citing higher-than-expected proceeds from asset sales. Analyst Konark Gupta now expects total net cash proceeds of C$730 million, or C$2.28 per share, compared with the bank’s previous estimate of C$200 million.

The Flightscape transaction carries an enterprise value of US$500 million. Scotiabank had already factored in the sale of Flightscape and other assets by the first half of 2027, leaving its fundamental outlook largely unchanged apart from lower projected net debt.

The bank’s revised estimate also assumes the potential sale of two additional assets. Depending on how CAE allocates the proceeds between business investment, its transformation programme and debt reduction, the company could be more likely to complete its existing normal course issuer bid, increase its limit or consider a substantial issuer bid.

Scotiabank said it remained positive on CAE’s multiyear outlook as its transformation, which began in late 2025, approaches expected completion by mid-2027.