Should you sell your Cargojet stock?

Paradigm Capital analyst Razi Hasan lowered his 12-month price target on Cargojet (Cargojet Stock Quote, Chart, News, Analysts, Financials TSX:CJT) to $135.00 from $139.00 while maintaining a “Buy” rating, citing persistent U.S. tariff-related headwinds ahead of the company’s third-quarter results.

Cargojet, a Canadian air cargo carrier that operates its own fleet providing overnight freight, ACMI, and charter services, will report Q3/F25 results on Nov. 4 after market close, with a conference call the following morning. Hasan said that while the company continues to execute well through a challenging macro backdrop, the near-term freight environment remains pressured by trade uncertainty.

“While freight transportation continues to experience weakness in volumes, we feel Cargojet has navigated well through this challenging environment,” Hasan wrote. “Although we expect continued softness in ACMI and moderating growth in All-in Charter, we are encouraged by the strong year-to-date performance in the Domestic Network.”

He noted that management’s disciplined capital program provides flexibility should conditions worsen.

“Cargojet offers one of the most attractive value propositions within our coverage, but near-term freight volume headwinds due to U.S. tariffs could still prove challenging,” he said.

Hasan expects Domestic Network revenue to rise 5% year-over-year in Q3, following a 14.4% increase in Q2 that benefited from one-time labour disruptions.

“The Domestic Network remains a bright spot for the company,” he said, pointing to the July extension of its long-term Air Transportation Services Agreement with Amazon Canada through March 2029, with an option to renew until 2031. “This reinforces Cargojet’s strategic relationship with a key customer and should help alleviate investor concerns over customer concentration.”

In contrast, Hasan said ACMI operations remain under pressure, forecasting a 27.9% year-over-year decline in Q3 revenue.

“Softness in volumes tied to U.S. tariff uncertainty continues to weigh on ACMI,” he said, noting that the company has temporarily shifted some routes from Asia and Europe to shorter South American corridors.

Charter activity is expected to stabilize after recent volatility.

“Volumes have levelled off over the past six months amid weaker demand out of China,” Hasan said. “The recent elimination of the de minimis exemption under U.S. trade policy could further constrain demand, though we model flat year-over-year Charter revenue for the quarter.”

Hasan said that Cargojet should generate $321.9-million in Adjusted EBITDA on $990.6-million of revenue in fiscal 2025, improving to $350.5-million on $1.07-billion in fiscal 2026, versus his previous estimates of $337.7-million and $363.4-million in EBITDA and $1.02-billion and $1.10-billion in revenue, respectively.

“Due to ongoing pressure from U.S. tariff-related headwinds impacting international business, we have trimmed our Q3 and full-year estimates,” he said. “Applying an 8.0× multiple to our revised 2026 Adjusted EBITDA estimate yields a target price of $135, down from $139.”

At current levels, Hasan said Cargojet remains attractively valued, trading at 6.4× next-twelve-month EV/EBITDA versus its five-year average of 8.9×.

“We believe these headwinds are largely priced in,” he said. “With disciplined capital management, long-term customer contracts, and strong domestic performance, we maintain our Buy rating.”

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