TSX:CJT - Post Discussion
Post by
retiredcf on Oct 19, 2022 8:59am
RBC
October 18, 2022
Cargojet Inc.
A whole new potential customer base emerging for Cargojet
TSX: CJT | CAD 123.04 | Outperform | Price Target CAD 274.00
Sentiment: Positive
Our view. News of yet another ocean liner company expressing interest in securing air freight capacity has prompted us to flag a potential new customer base for Cargojet. According to an article in Air Cargo News, Maersk has said air cargo will be needed as a reliable alternative to oceanfreight during the peak season, with the company highlighting, "there are still a number of supply chain challenges that our customers are tackling." We note that this follows Maersk's announcement last week that it has opened a new Chicago Air Freight Gateway and MSC's in September that it is partnering with Atlas for a new air cargo solution. Overall, we believe this highlights ocean carrier's strategies to fully integrate their supply chains and our view is that CJT would be a very appropriate partner for ocean carriers, representing another potential source of future international air freight demand for CJT. We continue to see a significant opportunity in CJT shares at today's levels, and reiterate CJT as our top transportation idea. For further detail see our note following CJT's Investor Day here.
What happened? According to an article in Air Cargo News, Maersk has said air cargo will be needed as a reliable alternative to oceanfreight during the peak season. “Although improved ocean freight conditions have reduced air demand slightly, the need for a reliable alternative is expected to remain high across Europe during peak season,” the company said. Looking at the overall airfreight market, Maersk identified volatility, with volumes trending down but rates remaining higher than 2019 levels due to jet fuel costs, lack of passenger/belly capacity and the impact of the war in Ukraine.
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