While dealing with China is an increasingly controversial business practice in the United States—particularly if you’re in the tech sector—it’s a bit different in Canada. Transportation company Cargojet (TSE:CJT) recently signed a new three-year deal with China, which led to a rally of over 2% in Monday morning’s trading.
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The three-year deal in question was set up with Great Vision HK Express and would see CargoJet run charter flights between Vancouver and Hangzhou, China, using a B767-300F aircraft. The agreement calls for CargoJet to run at least three flights per week for the period, and CargoJet noted that it would bring in over C$160 million for the life of the agreement.
This is actually something of a departure for CargoJet, which normally runs air cargo services throughout North America. But CargoJet landed the Chinese business thanks in large part to its “…industry-leading record of on-time performance and reliability, together with the connection opportunities from Vancouver to 15 other cities in Canada,” noted co-CEO Jamie B. Porteous.
A Timely Maneuver
The new deal comes at a good time for Cargojet, whose recently released earnings report showed that revenue was little changed from the same time last year. With the new deal to run Chinese flights, Cargojet may be able to help turn that figure around. In fact, it might just be the wedge it needs to get more Chinese business going or even more international business in general.
Is Cargojet Stock a Good Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on CJT stock based on five Buys and one Hold assigned in the past three months, as indicated by the graphic below. After a 15.02% rally in its share price over the past year, the average CJT price target of C$153.94 per share implies 35.04% upside potential.
