CargoJet’s Q4 was solid, Beacon says

Its fourth quarter results are in the books and Beacon Securities analyst Ahmad Shaath remains bullish on Cargojet (Cargojet Stock Quote, Chart, News, Analysts, Financials TSX:CJT).

On February 26, CJY reported its Q4 and fiscal 2023 results. In the fourth quarter, the company posted Adjusted EBITDA of $81.6-million on revenue of $254.7-million, a topline that was down 16.3 per cent from the same period a year prior.

“Given the challenging economic environment we faced, we are very pleased with our Q4 and the full-year results,” said co-CEO Jamie Porteous. “Two thousand twenty-three was a transitional year for us as we moved from managing a period of hypergrowth during the COVID-19 era to focusing on cost management and preparing the business to face the current economic environment. We rationalized our capital expenditure plans and managed costs to maintain adjusted EBITDA margins. We made solid progress in each of these areas.”

The analyst said these results were solid and that the accounting noise around the quarter is just that, noise.

“Q4/FY23 total revenue was $222 MM, hamstrung by $32.8 MM one-time accounting “catch-up” adjustment measures for Amazon (AMZN-Q, Not Rated) warrants,” he wrote. “Focusing on what matters, operating revenues came in slightly ahead of our expectations at $193 MM vs. $188 MM (Figure 1). Domestic network performance exceeding our expectations slightly, with revenue down only 1.3% y/y (vs. our -1.8% expectations). Both of ACMI and All-in Charter business lines came in modestly ahead of our expectations as well and registered modest y/y growth (2% for ACMI and 1% for All-in Charter).”

In a research update to clients February 26, Shaath maintained his “Buy” rating and price target of $142.00 on CJT, implying a return of 26 per cent at the time of publication.

The analyst thinks Cargojet will post EBITDA of $334.0-million on revenue of $974.0-million in fiscal 2024.