Cargojet (CJT.TO) reported solid first-quarter results despite the macro volatility, underpinned by resilient domestic network performance and growth in new charter business in South/Central America, notes Stifel Canada.
Analyst Daryl Young, who is maintaining a buy rating and $120.00 price target on the company's shares, notes that, at first look, Cargojet's adjusted EBITDA of $81.9 million was 4.9% above consensus.
Management provided a constructive outlook, with the domestic network performing well through April, while the new charter customers/routes are expected to smooth traditional seasonality across the year.
Revenue associated with the grounding of the MD-11 jets last November is expected to continue through the third quarter of this year. The international aircraft, crew, maintenance and insurance (ACMI) business remains slow, but appears to have found a new run-rate for the north/south routes (east/west routes will still take time to recover), Young adds.
"Overall, we continue to think that CJT is doing a good job managing through the current depressed environment, with its fundamental results and share price poised to see upside as tariff/trade overhangs eventually fade."
Price: $82.17, Change: $+4.47, Percent Change: +5.75%