On Friday, BofA Securities analyst Donald Epstein upgraded CAE Inc. (TSX: CAE ) to a neutral rating and bumped the price target up from $19 to $32. Epstein’s reassessment of the company’s stock follows a series of organizational and operational changes at CAE, which have included management transitions and a more prudent capital expenditure deployment.

CAE Inc (NYSE: CAE )., known for its simulation technologies and training services, has made significant strides in addressing previous challenges. Epstein noted that CAE has written off approximately $570 million from its defense business and has been navigating through pilot hiring headwinds in the U.S. due to aircraft OEM production constraints. CAE has also reduced heacount, immproved their use of capital expenditure, and have shown the ability to retire precarious contracts. These steps, coupled with meaningful management changes such as upcoming CEO and CFO transitions and the appointment of a COO, have contributed to the firm’s improved outlook on the company.

Regarding tariff risks, Epstein believes CAE is relatively insulated due to the local nature of its services and low imports on simulator materials. Additionally, the defense segment of the company is showing signs of improvement following a restructuring, with CAE increasing its growth outlook for the defense business and expecting higher margins for FY2025.