CIBC 2EQUITY RESEARCH
November 1, 2021 Earnings Update
CARGOJET INC.
Investing In The Future
Our Conclusion
Our positive thesis on CJT is unchanged. It has a strong revenue pipeline. While it sees some expense pressure, we see a path towards margin expansion looking out over our forecast period. Our price target of $245 and Outperformer rating are unchanged.
Key Points
Revenue Pipeline Remains Strong: CJT reported Q3 top-line revenue that was up 17% Y/Y. Domestic core overnight revenue per day was up 7.4% Y/Y and block hours were up 10% Y/Y. Despite integrating the Amazon CMI contract that was introduced back in April, Q3 still saw the third-highest level of domestic revenue and second-highest block hours going back to 2014. In other segments, ACMI revenue was up 21% Y/Y and ad hoc charter saw revenue up 2.1% Y/Y. Looking ahead, we continue to see the company with a strong pipeline going in Q4 and 2022.