Is Cargojet undervalued?

National Bank Financial analyst Cameron Doerksen says Cargojet’s (Cargojet Stock Quote, Chart, News, Analysts, Financials TSX:CJT) growth outlook remains broadly positive ahead of its second-quarter results.

As reported by the Globe and Mail, in a July 14 preview of Cargojet’s Aug. 10 quarterly report, Doerksen maintained his “Outperform” rating and raised his target to $109.00 from $108. 00. The average target is $117.33.

The analyst said domestic network revenue was flat year-over-year in Q1, but expects market conditions to remain steady. ACMI revenue, mainly tied to DHL, has faced difficult comparisons as Cargojet shifted flying toward shorter-haul routes, but Doerksen said DHL’s more optimistic growth outlook could benefit Cargojet later this year and into 2027.

For Q2 and the rest of 2026, Doerksen said the main source of growth should come from all-in charter revenue, helped by a contract serving Latin American and Caribbean markets that ramped earlier this year.

On May 4, Cargojet reported Q1 revenue of $254.7-million, up 1.9% from a year earlier, supported by a 26.3% increase in charter revenue. Domestic revenue was flat, while ACMI revenue declined because of macroeconomic conditions and higher amortization of contract assets.

Adjusted EBITDA was $81.9-million, up 1.4%, while Adjusted EBITDA margin was 32.2%, compared with 32.3% a year earlier.

CEO Pauline Dhillon said Cargojet delivered revenue growth despite trade uncertainty, disruption and a difficult comparison with a strong first quarter of 2025.

“Domestic revenues were steady and resilient year over year despite market headwinds and geopolitical conditions, demonstrating the durability of our business,” Dhillon said.

Cargojet reported free cash flow of $87.4-million, compared with an outflow of $45.9-million a year earlier, helped by asset disposals and higher operating cash flow. Net earnings fell to $4.1-million from $48.0-million.

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