Cargojet Inc (TSX: CJT)
Cargojet Inc (TSX: CJT) has been identified as a Top Canadian stock pick for investors seeking high upside potential in 2025, with analysts forecasting a 12-month target price of CAD 156.90, representing an impressive 65% upside from its recent closing price of CAD 94.58.
Strong Analyst Sentiment and Ratings
Consensus Rating: Strong Buy from 10 analysts
Average Target Price: CAD 156.90
Upside Potential: ~65% from current levels
Stock Target Advisor Rating: Slightly Bullish (6 positive signals, 3 negative)
Positive Fundamentals
Strong Cash Flow Position
Cargojet consistently generates positive total cash flow and free cash flow, reinforcing its financial flexibility and ability to reinvest in growth or return value to shareholders.
Valuation Advantage
The stock appears undervalued on both free cash flow and earnings metrics, ranking in the top quartile among peers.
This implies investors may be able to purchase shares at a discount relative to the company’s fundamental performance.
Superior Long-Term Returns
Over the past five years, Cargojet has outperformed its sector peers in terms of total returns, placing it in the top quartile. This long-term performance reflects management’s execution and the company’s strong market positioning.
Robust Earnings Growth
The company has delivered top-quartile earnings growth in the last five years, underscoring a proven ability to scale profitability even during periods of macroeconomic headwinds.
Negative Fundamentals
Dividend Yield is Modest
While not a concern for growth-focused investors, the dividend yield is below the industry median. Cargojet may not be ideal for income investors seeking steady payouts.
Volatile Stock Performance
The stock has shown higher-than-average volatility, which may not suit all investors. It’s important to assess your risk tolerance before investing.
Slower Revenue Growth
Despite strong earnings, the revenue growth over the last five years has been below median relative to peers. Investors should monitor whether new growth drivers (e.g., fleet expansion or e-commerce logistics demand) start to accelerate topline performance.
Outlook
Cargojet operates the only national overnight air cargo network in Canada, making it a critical player in the e-commerce and time-sensitive shipping space. With long-term contracts with major partners like DHL Express and growing demand for expedited delivery, Cargojet is well-positioned to capitalize on structural tailwinds in logistics and air freight.
The company is also expanding its fleet, adding four new aircraft in 2025, and has a flexible business model that allows it to scale up operations quickly as demand grows.
Cargojet Inc offers a compelling risk-reward profile, with:
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Solid fundamentals (cash flow, earnings growth)
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Valuation upside (~65%)
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Strategic exposure to a vital logistics niche
While volatility and limited dividend yield are valid concerns, investors with a growth-oriented mindset and higher risk tolerance may find Cargojet an excellent Canadian stock to buy now and hold through 2025 and beyond.
STA Research (StockTargetAdvisor.com) is a independent Investment Research company that specializes in stock forecasting and analysis with integrated AI, based on our platform stocktargetadvisor.com, EST 2007.
