Canadian Defence: Industry Developments & Key Financial & Valuation Metrics

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Canadian Defence: Industry Developments & Key Financial & Valuation Metrics

TD SECURITIES INC. - CANADA WEEKLY REPORT

June 22, 2026

■Transportation/Aerospace Canadian Defence: Industry Developments &

Key Financial & Valuation Metrics

Tim James, CFA^ THE TD COWEN INSIGHT

416 308 9773

In June, the Government of Canada has been strengthening relationships with Europe,

tim.james@tdsecurities.com

announcing new collaborations in defence and related industries. In addition, certain

Jasroop S Bains, CFA, CPA^ Canadian defence suppliers have been active in M&A and aligning with international

416 307 9422 partners that could be winners of Canadian domestic opportunities and/or represent equally

jasroop.bains@tdsecurities.com

important long-term international sources of revenue.

Valuations of North American defence stocks have continued to cool in June, albeit from

record levels at end-February. U.S.-based defence company forward EV/EBITDA multiples

are down 2-12% since the end of May. Multiples of Canadian stocks with defence exposure are

down an average 4%, including an outlier in Exchange Income which is +7%.

This report provides a recap of noteworthy developments for the Canadian defence industry

over the past two weeks, valuations for a group of Canadian public companies with exposure

to Canadian defence (Figures 3 and 4) and key financial metrics (Figure 1).

The Canadian government and Canadian defence companies have been working in June

to align themselves with international partners. Agreements are intended to help Canadian

companies secure the contracts that will drive 11.5% (CAGR) growth in Canadian defence

industry revenue over the next 10 years and create opportunities for non-Canadian revenue.