Cargojet Stands at a Crossroads: Buy or Sell?

Cargojet Inc. (CJT-T) finds itself in uncharted waters as its stock hits a decade-low valuation, despite holding a commanding position in Canada’s overnight air cargo market. According to Stifel analyst Daryl Young, the elimination of the de minimis loophole—allowing duty-free shipments under $800 into the U.S.—has created significant challenges for the company.

With a substantial shift toward international cargo, Cargojet's valuation has dipped to approximately 6.6 times next year's expected earnings. Young believes that as trade tensions ease and tariffs reduce, Cargojet's valuation could see a rebound, especially if the global freight market experiences a cyclical upswing. He emphasizes that meaningful improvements in their return on investment capital (ROIC) and cash flow generation are crucial for sustainable growth.

Young has initiated coverage on Cargojet with a bullish 'buy' recommendation and a price target of $125, reflecting an enticing 27-percent upside from Wednesday's closing price.

Dollarama: A Retail Giant on the Rise!

Dollarama Inc. (DOL-T) is shining bright as a 'paragon of quality and growth', as noted by CIBC analyst Mark Petrie. The company recently unveiled first-quarter results that not only beat expectations but showcased strong same-store sales growth of 4.9 percent, powered by a robust April and Easter season.

Earnings per share also surpassed forecasts by an impressive 14 percent, yet management expressed caution over 'fragile' consumer behavior in the face of trade uncertainties. With a majority stake in Dollarcity, which saw earnings soar by 82 percent in the quarter, Dollarama is looking to maintain momentum. Petrie has upped his price target for Dollarama from $174 to $204, although he maintains a 'neutral' rating, highlighting the challenge of envisioning multiple expansions going forward.

WSP Global’s Bold Move: Growing Through Acquisition!

WSP Global Inc. (WSP-T) is once again proving its mettle as a 'best-in-class compounder' with a significant acquisition. The Canadian engineering powerhouse has announced the purchase of British consulting firm Ricardo PLC for approximately $670 million. This move comes amid pressure on Ricardo from an activist investor seeking better performance.

Analyst Ian Gillies believes that divesting underperforming sectors could soon lead Ricardo to match WSP’s profit margins. He has raised WSP's target to $305 per share from $300, citing its defensive strengths and robust M&A capabilities as key reasons to keep an eye on the stock.

The North West Company: Navigating Through Challenges!

The North West Company Inc. (NWC-T) finds itself in turbulent waters due to Canadian wildfires affecting sales, according to CIBC analyst Ty Collin. The company reported first-quarter results that showed positive progress on labor efficiency and inventory management, but the immediate outlook remains uncertain.

Yet, Collin sees this as a temporary hurdle before significant upcoming catalysts, particularly a $23 billion settlement to compensate First Nations communities. He believes the company is uniquely positioned to harness the influx of funds, potentially impacting sales positively starting in 2026. Although he has lowered his target slightly to $59 from $60, he continues to commend the stock’s 'outperformer' potential.

Definity Financial: A Power Play in the Insurance Market!

Definity Financial Corp. (DFY-T) is set to reshape the Canadian insurance landscape with a groundbreaking $3.3 billion acquisition of Travelers’ Canadian operations, catapulting it into the fourth-largest property and casualty insurer in the country. Raymond James analyst Stephen Boland highlights the rarity of such opportunities in Canada, making this acquisition particularly significant.

Boland has raised his target for Definity's stock to $74 from $65 while maintaining a 'market perform' rating, expressing confidence that the deal will not just proceed, but also significantly enhance the company's scale and market presence during a time when size is critical for success in the insurance sector.