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On Tuesday, RBC Capital Markets adjusted its price target on shares of Cargojet Inc. (TSX:CJT:CN) (OTC:CGGJF), lowering it to C$183.00 from the previous C$193.00, while sustaining an Outperform rating on the stock. The adjustment comes as the firm’s analyst, Walter Spracklin, maintains a positive outlook on the company’s financial performance, particularly its earnings before interest, taxes, depreciation, and amortization (EBITDA).
Spracklin’s commentary highlighted that Cargojet’s Q1 EBITDA estimate remains steady at C$83 million, surpassing the consensus forecast of C$81 million. He noted that the company’s Canadian overnight business is expected to be minimally affected by tariffs due to its domestic focus. Spracklin’s long-term projections for the company remain unchanged and are significantly above consensus, with a 2026 EBITDA estimate of C$406 million compared to the consensus of C$377 million.
The analyst believes that Cargojet is poised to benefit from increasing e-commerce penetration and improved margins due to better capacity utilization. The focus for the first quarter, according to Spracklin, is likely to be on the company’s margins and potential operating leverage. However, the target multiple has been adjusted to 8.5 times from 9 times, leading to the new price target of C$183.
Cargojet is known for its overnight shipping services within Canada and has been capitalizing on the growth of e-commerce, which has led to an increase in demand for timely and reliable delivery services. The company’s strategic positioning and operational efficiency appear to contribute positively to its valuation, despite the revised price target.
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