Analyst Fadi Chamoun of BMO Capital maintained a Hold rating on Cargojet (CGJTF – Research Report), reducing the price target to C$95.00.
Fadi Chamoun has given his Hold rating due to a combination of factors that reflect a cautious outlook for Cargojet. The analyst has lowered the forecast for Cargojet’s core revenues, anticipating a more subdued freight demand environment. This adjustment is influenced by the rising macroeconomic risks and shifting trade policies, which contribute to limited visibility into future demand. Consequently, the target price has been reduced to $95, maintaining a Market Perform rating.
Despite these challenges, Cargojet’s balance sheet remains in decent shape, with expectations of modest positive free cash flow in 2025. The company is projected to convert a significant portion of its EBITDA into operating cash flow, supporting its financial stability. However, cost pressures, particularly those related to the renewal of the collective agreement with pilots, may escalate in the coming years. While the company benefits from a strong market position in Canada, its valuation is vulnerable to broader sector dynamics, justifying the Hold rating.
CGJTF’s price has also changed dramatically for the past six months – from $100.145 to $56.005, which is a -44.08% drop .