08:11 AM EDT, 04/24/2024 (MT Newswires) -- US Aerospace and Defense sector earnings are a positive indicator for CAE Inc. ( CAE ) , RBC Capital Markets said.

"Overall, we see Q1 results as a positive read-through for CAE, reflecting commentary from GE Aerospace that passenger demand remains robust, which we see as setting the stage for solid Civil performance at CAE into F2024," analyst James McGarragle said in a note to clients.

"Looking at Defense, demand was solid in the quarter, with LMT also flagging an improving supply chain," McGarragle said. "While CAE's Defense segment's profitability will be driven by company specific factors in our view, we nevertheless view the backdrop as supportive of margin improvement longer-term."

GE Aerospace (GE), RTX Corp. ( RTX ) and Lockheed Martin Corp. ( LMT ) reported results on Tuesday.

"Each company exceeded consensus expectations in Q1, with aerospace and defense revenues up nicely," the analyst said. "GE raised its FY guidance, while RTX and LMT both maintained."

McGarragle maintained an Outperform rating and $34 price target on CAE.

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