Hey there,
Cargo Jet has been one of the few airlines worth owning in recent years. It also looks cheap, trading at only 7.4x earnings (although that jumps to 15.79x earnings on a forward basis). That said, the company is still expected to post some nice growth over the next few years and even at forward valuations looks attractive. Recently, it renewed its UPS Canada Cargo services agreement through 2030 (was set to expire in 2025) and it has recently entered into aircraft to customer contracts known as ACMI. The latter is largely expected to have a positive impact on the company, especially in light of the recent deal with DHL.
Last quarter it delivered results that were largely inline with estimates and while the company did warn against a recession in the first half of 2023, the ACMI announcement should help offset and negative impacts with slowing retail. In fact, it is not seeing any weakness in this area heading into 2023. The net result was guidance in the high, single-digit range which was above analysts estimates. While domestic overnight revenue is expected to drop next year, it looks like next quarter (Q4) will be strong despite a very tough comp in last year's record setting quarter.
All in all, I like CJT at these levels despite the potential economic headwinds which would result in slowing demand for their Domestic segment. Worth noting, analysts are pointing to low to mid, single digit declines in the first half of 2023 in this segment (their largest). The ACMI segment however, seems to be more than offsetting any weakness. Personally, I'd have no problems with picking up CJT at these levels.
Mat