Up 49% in Two Months, Is Cargojet Stock a Buy Today?

Cargojet (TSX:CJT) stock saw shares rise 49% in the last two months but remains down by 49% since all-time highs. So, is more to come?

| More on:

Shares of Cargojet (TSX:CJT) stock continue to climb higher as the market seems to be on the road to recovery. Yet even after seeing shares rise 49% in the last two months alone, the company is still about half of all-time highs.

So, what do investors think about Cargojet stock? Is this it? Or could there be another rise in share price for the once-great company? Let’s take a look.

What happened?

Cargojet stock was one of the high fliers during the pandemic, when restrictions kept people at home, ordering online. These online orders rose significantly, leading to the company increasing its destinations as well as adding new aircraft.

Luckily, Cargojet stock had already made partnerships with some of the largest shipping companies on the planet. That includes Amazon and DHL, with multi-year deals signed to see the company bring its services to a global scale.

But even at home, Cargojet stock remained the only overnight cargo airline in the country. Things were going so well until they weren’t. With the market falling and restrictions ending, investors cut their losses. And this caused shares of Cargojet stock drop. So, what about now?

Undervalued

Cargojet stock has since been called one of the most undervalued stocks on the TSX today. Shares are down by (get this) 49% since all-time highs. And even with the most recent rise, analysts believe there should be more to come.

The last two years have been difficult, but now we’re on the verge of a recovery. Should interest rates and inflation come down, consumers will have more cash in their pockets. That cash can be used to buy the consumer goods that many have stayed away from over the last two years. And that will see another increase in the demand for Cargojet stock.

For now, however, shares may be up, but investors remain on the sidelines. This could come from the most recent earnings report, which saw revenue down year over year. Even so, analysts believe there is a strong outlook for this stock.

Analysts weigh in

After the company reported third-quarter results, analysts were pleased that the company continues to support lower-cost initiatives and balances that with increasing operating income and revenue as volumes recover. Overall, notes were positive, despite narrowly missing earnings estimates.

Cargojet stock is now continuing to focus on bringing costs down while preparing for the future. A future that will see a high rise in ecommerce use. Even so, the company remained focused on conservative projections, though analysts believe they could be even higher through to 2025.

So, in the very near future, analysts believe Cargojet stock will soar high once again. They’ve touted it as an outperformer, especially as it continues to bring in cash from fleet plans and asset sales. And as the company recently increased its dividend by a whopping 10%, along with its buyback plan, management seems confident, too.

Therefore, if you’re looking for some solid growth in 2024 and beyond, Cargojet stock could be of great consideration, even with shares up 49% in the last two months.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Fool contributor Amy Legate-Wolfe has positions in Cargojet. The Motley Fool has positions in and recommends Cargojet. The Motley Fool recommends Amazon. The Motley Fool has a disclosure policy.

More on Dividend Stocks

analyze data
Dividend Stocks

Here’s Why the Average TFSA for Canadians Aged 41 Isn’t Enough

The average TFSA simply isn't enough for most Canadians in their early 40s. Here's how to catch up.

Read more »

cloud computing
Dividend Stocks

Insurance Showdown: Better Buy, Great-West Life or Manulife Stock?

GWO stock and MFC stock are two of the top names in insurance, but which holds the better outlook?

Read more »

concept of real estate evaluation
Dividend Stocks

How to Earn a TFSA Paycheque Every Month and Pay No Taxes on It

Canadian REITs can turn your TFSA into a monthly paycheque machine for life. Here's how Morguard North American Residential REIT…

Read more »

A plant grows from coins.
Dividend Stocks

The Smartest Dividend-Growth Stocks to Buy With $1,000 Right Now

New dividend-growth investors should consider CN Rail (TSX:CNR) stock and another top play if they're looking to build wealth over…

Read more »

Dividend Stocks

The 3 Top Canadian Stocks to Buy With $1,000 Right Now

If you want consistent income, look to consistent dividend payers. These three stocks are some of the best in the…

Read more »

A worker gives a business presentation.
Dividend Stocks

Want a 6% Average Yield? 3 TSX Stocks to Buy Today

These stocks pay good dividends that should continue to grow.

Read more »

chart reflected in eyeglass lenses
Dividend Stocks

Is Alimentation Couche-Tard Stock a Buy for its 0.9% Dividend Yield?

Couche-Tard stock's small yield is not enticing, but its growth potential could be a wealth creator.

Read more »

Hourglass and stock price chart
Dividend Stocks

5.2% Dividend Yield! I’m Buying This TSX Stock and Holding for Decades!

With its 5.2% dividend yield, Toronto-Dominion Bank (TSX:TD) is a stock I'm eagerly buying.

Read more »