Q4/F26 First Look; Transformation & ME Pressures Entering F2027

Research evidence excerpt

Q4/F26 First Look; Transformation & ME Pressures Entering F2027

Transportation/Aerospace

CAE Inc.

TD SECURITIES INC. - CANADA QUICK TAKE: EARNINGS UPDATE

May 22, 2026

Price: C$37.06 (05/21/2026) Q4/F26 First Look; Transformation & ME

Price Target: C$49.00 Pressures Entering F2027

BUY (1)

ESG SCORE: 62/100

Tim James, CFA^ THE TD COWEN INSIGHT

416 308 9773

CAE reported stronger-than-forecast revenue/FCF but lower adj. EBITDA/EBIT/EPS (excl. tax

tim.james@tdsecurities.com

benefit). F2027 guide lower-than-expected, though not entirely surprising given transformation

Jasroop S Bains, CFA, CPA^ plan/ME conflict impacts. Highly anticipated long-term (F2030) targets offer upside and

416 307 9422 cash flow, but 4 years out could lead market to factor F2027 weakness into short-term stock

jasroop.bains@tdsecurities.com

response. Conf call at 8:00 am.

Key Data

Symbol TSX: CAE-T Impact: Slightly Negative For Estimates

Market Cap C$11.9B

Q4/F26 adj. EBITDA of $326mm (TD Cowen/cons: $349/$342mm). Adj. EPS of $0.42

General: The data above (excl. 12-month dividend estimate

and float shares) reflects FactSet data. Refer to our comp (TD Cowen/cons: $0.41/$0.42), biased higher by lower tax rate (4% vs. 25% forecast).

table for TD Cowen's calculation. Consolidated revenue +4% y/y, slightly above forecast. Civil EBIT $152 mm (TD Cowen:

$188mm) and Defense $59mm (TD Cowen: $47mm). See Figure 1 for details.

Training headwinds and Middle East conflict pressure Civil margin. Products revenue was

$283 million, +17% y/y (TD Cowen: $259 million) based on 17 FFS deliveries (TD Cowen: 18).

Training $464 million, -5% y/y (TD Cowen: $463 million). Network utilization of 73% (75% in Q4/

F25). 1.29x b:b.

Strong Defense margin & orders. Products revenue was $314 million, +16% y/y (TD Cowen: