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A stronger-than-expected first quarter result this week from CAE Inc. (NYSE:CAE), the leading manufacturer of full-flight simulators, led to a series earnings and ratings revisions Thursday.

While the Montreal manufacturer’s civil segment is still expected to remain under pressure, its strong military sales and margins are expected to provide a buffer throughout the downturn.

The company is also in the midst of a restructuring of its operations that is expected to save C$15-million annually starting later this year.

Fadi Chamoun, UBS analyst, said he now expects the company to post earnings of C63¢ a share next year, and C71¢ the year after. This had him raise his price target to C$9 a share, from C$7.75 previously, but maintained his “neutral” rating on the stock.

He said in a note to clients:

A bottom in passenger traffic and aircraft order/delivery ratios are essential for a sustained re-rating in CAE’s valuation. We continue to monitor the key indicators and would be inclined to become more constructive on CAE once a turnaround becomes more visible.

Ben Cherniavsky, Raymond James analyst, is a little more bullish and said he continues to encourage CAE’s stock as an alternative to other aerospace companies, including Bombardier Inc.

He raised maintained his “outperform” rating on the stock and raised his price target to C$9.50 a share, from C$8.50.

Chris Murray, CIBC World Markets analyst, also raised his price target to C$9 a share, from C$8 a share, but maintained his “sector performer” rating on the stock.

“While the military business is expected to grow by more than 10% this year, it is not sufficient to offset the decline in civil segments,” he said.

Source: CAE: Earnings Lead to Upward Revisions