Cargojet Inc.’s (TSE:CJT) (OTC:CGJTF) master services agreement with Canada Post and Purolator (91% owned by Canada Post) has been extended for the second time. The agreement is now valid until September 30, 2029, more than four years longer. The additional option to extend again until March 31, 2031, remains open.
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The C$1 billion agreement was originally inked in 2014 for a seven-year term, which was then extended in 2017 until March 31, 2025. As per the deal, Cargojet has been providing comprehensive air cargo services for Canada Post across Canada. The deal has helped the air cargo transportation services provider set up a dedicated Air Cargo Network for Canada Post.
The newly extended deal will continue to have minimum guaranteed volumes of cargo, allowing Cargojet to keep enhancing and adding value to its services.
“Cargojet’s flagship domestic air network is uniquely positioned to serve the needs of all of our strategic customers. By serving over 90% of Canadian population each and every day, we provide a critical backbone for Canada’s supply chains,” said Ajay Virmani, CEO of Cargojet.
Following the news, shares of the company gained 1.7% at market close, Tuesday.
Is Cargojet Stock a Good Buy?
Wall Street seems bullish on CJT stock, with a Strong Buy consensus rating based on five Buys and one Hold. The average price target of C$197.34 reflects an upside of 63.79% over the year.
