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  5. CJT.A: After a long period of sustained growth, this company'share , since more two years is consistenly declining, except for the last month where some upward movement seems take place. [Cargojet Inc - Ordinary Shares and Variable Voting Shares]
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Q: After a long period of sustained growth, this company'share , since more two years is consistenly declining, except for the last month where some upward movement seems take place. From your point de vue is it a turning point and what is your appreciation on the next future (2-3 years) of the company?

Thank you so much in advance.

Gab
Asked by Gabriel on December 01, 2023
5i Research Answer:

Novemeber was a good month for almost everything; CJT rose 24.5% in the month. EPS will drop this year from $11.45 to $2.77E, and then EPS is expected to rise 20%+ in 2024. The last quarter was weak, and it has clearly been impacted by a consumer spending slowdown. With Canada GDP growth very low (negative last reading) and US growth very high (5.2%) the outlook is mixed. CJT is highly sensitive to the economy. Much of its prior growth was acquisition-related. Debt remains on the high-ish side at 3X cash flow. Revenue fell last quarter and it has had executive changes (co-CEOs now). The stock has turned, but we are not quite ready to call a fundamental turn. We would of course like to see revenue grow and not shrink. It is still expensive at 35X earnings, but of course this happens when earnings decline. Much here is going to depend on the economy. We would consider it OK but not compelling today.