Shares of Cargojet (TSE: CJT) (OTC: CGJTF), a Canadian air transportation services company, are trending higher today despite weakness in the overall stock market. This is because the company released its long-term targets for 2026 as well as its strategic plans. Cargojet’s targets look solid and imply high growth and profitability. As a result, the market is rewarding the stock.
Cargojet’s Strategic Updates and 2026 Financial Targets
With an expected fleet size of 40 aircraft by the end of this year, Cargojet is anticipated to reach 90% of Canadians daily and expand its network to 16 cities across the country. Ajay Virmani, Cargojet’s CEO, stated that the company’s volumes are steady and in line with expectations for the current quarter.
Regarding the targets for 2026, CJT is anticipating revenue to range from C$1.3 billion to C$1.4 billion. For reference, the company ended 2021 with revenue of C$757.8 million and generated revenue of C$905.6 million on a trailing-12-months basis. Adjusted EBITDA is expected to be between C$500 million and C$550 million compared to C$293 million of adjusted EBITDA in Fiscal 2021.
Next, adjusted free cash flow is projected to be between C$320 million and C$360 million compared to C$160 million in 2021. Lastly, Cargojet is expected to take on more leverage, as its net debt/adjusted EBITDA ratio is forecast to come in between 1.50x and 2.50x compared to 1.03x in 2021.
Is Cargojet Stock a Buy, According to Analysts?
According to analysts, Cargojet stock earns a Moderate Buy consensus rating based on five Buys and two Holds assigned in the past three months. The average Cargojet stock price forecast of C$205.71 implies 67.2% upside potential. Analyst price targets range from a high of C$287 to a low of C$158.
Conclusion: Cargojet’s Targets Inspire Confidence
In a time of uncertainty where some companies can’t even project how their Fiscal 2022 will end, Cargojet came out and released targets for 2026. This gave investors a sense of relief, especially since the targets imply solid growth. As a result, the stock is rallying while the market is trending lower today.
