TSX:CJT - Post Discussion
Post by
retiredcf on Aug 08, 2022 12:25pm
Ink Research
Morning Report: Cargojet stock about to lift off again?
August 8, 2022
We start the week in the Industrials sector which was hit by recession fears in Q2. Air freight hauler Cargojet (CJT) is a case in point, falling 25% last quarter. The stock has experienced plenty of turbulence since we highlighted it on May 21, 2021 with a rainy outlook, but its INK Edge outlook is now brightening with some price momentum behind it after Q2 results were announced on July 27th. The stock has closed above its 20 and 50-day moving averages since July 28th.
Q2 revenue came in at $246.6 million, up 43.3% from Q2 2021. Q2 revenue included $62.6 million in fuel and other cost pass through. Net earnings were $9.12 per diluted share, up from a loss of $0.64 in the comparable period. Meanwhile trailing 12-months cash flow is on the rise according to Refinitiv data. It came in at $18.33 per share as of Q2, up from $9.49 a year earlier.
Cargojet has two potential tailwinds. In the shorter term, it can benefit from reduced competing belly cargo capacity due to reduced passenger flights. In the longer term, it expects the trend toward more e-commerce to continue. That said, CEO Ajay Virmani indicates a cautious approach towards growth investments in view of cost pressures and geopolitical uncertainty. Meanwhile, when the stock hit an air pocket on June 16th dropping 19.3% on the day, CFO Scott Calver was buying.
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