CJT: European Expansion And Buybacks Will Support Future Margin Resilience

Cargojet's updated analyst price target has been revised to C$109.21 from C$109.21, as analysts modestly reduce long-term growth and profitability assumptions while still expecting solid revenue expansion and maintaining generally positive ratings on the shares.

Analyst Commentary

Recent research updates reflect a more cautious stance on Cargojet, with multiple firms trimming their price targets to account for tempered expectations on long term volume growth and margin expansion. Despite these downward revisions, the overall tone remains constructive as analysts still see room for multiple expansion if management can deliver on execution milestones.

Bullish Takeaways

• Bullish analysts continue to see upside to the current share price, even after lowering targets, indicating that the stock still offers an attractive risk reward profile relative to revised fundamentals.
• Supportive ratings such as Buy and Outperform suggest confidence in Cargojet's ability to sustain solid revenue growth through contract wins, e commerce demand, and potential international expansion.
• Valuation is viewed as reasonable versus long term growth prospects, with bullish analysts expecting that improved operating efficiency and scale benefits can support earnings acceleration over time.
• Management's track record of executing on network optimization and cost controls is seen as a key pillar enabling the company to meet or exceed the moderated forecasts embedded in the new targets.

Bearish Takeaways

• Bearish analysts are signaling that prior expectations for growth and profitability were too aggressive, trimming targets to reflect a more normalized post pandemic air cargo demand environment.
• There is increasing caution around execution risk, particularly the ability to maintain high asset utilization and manage costs amid volatile fuel prices and evolving customer mix.
• Some caution centers on valuation sensitivity to macro headwinds, with concerns that any further slowdown in freight volumes or e commerce activity could pressure earnings and warrant additional downside to targets.
• Uncertainty around the timing and magnitude of margin recovery is leading more conservative analysts to cap upside potential, highlighting limited room for operational missteps at current valuation levels.

What's in the News

• The board has authorized a new normal course issuer bid allowing Cargojet to repurchase up to 1,400,000 common voting shares, or 9.28% of shares outstanding. All repurchased shares will be cancelled, and the program will run until November 10, 2026 (Key Developments).
• Cargojet announces that founding partner and current Co-CEO Pauline Dhillon will become sole Chief Executive Officer effective January 1, 2026, which the company states will position it to pursue growth in European and Asian markets (Key Developments).
• Co-CEO and founding member Jamie B. Porteous will retire from his executive role on December 31, 2025. He will transition to Strategic Advisor through the end of 2026 to support leadership continuity (Key Developments).
• The company has launched a scheduled direct air cargo service between Canada and Europe via Liege Airport. The service will initially operate weekly and will be integrated into Cargojet's domestic overnight network to improve transit times and connectivity (Key Developments).
• Under the prior buyback program announced November 4, 2024, Cargojet has completed the repurchase of 704,533 shares for CAD 73 million, representing 4.51% of shares. No additional shares were bought between July 1 and September 30, 2025 (Key Developments).

Valuation Changes

• Fair Value: Unchanged at approximately CA$109.21 per share, indicating no revision to the long term intrinsic value estimate.
• Discount Rate: Fallen slightly from about 8.11% to 8.01%. This reflects a modestly lower perceived risk or cost of capital.
• Revenue Growth: Risen moderately from roughly 1.60% to 2.05% annually, signaling a somewhat more optimistic view on long term top line expansion.
• Net Profit Margin: Edged down slightly from around 6.04% to 5.96%. This suggests a marginally more conservative outlook on future profitability.
• Future P/E: Eased slightly from about 28.31x to 28.22x, pointing to a minimal reduction in the valuation multiple applied to forward earnings.