There are many types of companies that benefit from Amazon’s sprawling e-commerce, supply chain logistics, delivery, cloud services, advertising, and entertainment businesses.

One of them continues to be Canada’s Cargojet (TSX:CJT), which just struck a new deal with Amazon.

And like Amazon, Cargojet’s stock took a breather last year but is still higher by 237 per cent over the last five years compared to a gain of 295 per cent for its American partner.

This analyst calls Cargojet a special situations stock, believes it will take flight again this year and could gain nearly 60 per cent. Here’s why.

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Acumen Capital has made Cargojet one of its top 10 special situations picks for 2022 with a target price of $300. The average target price is $249.42, implying a potential return of about 59 per cent.

Here are some hi-lights from a report by analyst Nick Corcoran:

CJT is well positioned with a dominant market position and aircraft deliveries through the end of 2024 expected to fuel both domestic and international growth.

CJT entered a new agreement with Amazon that provides:

(1) Block space on the domestic network.

(2) Charter flights on an ad hoc basis.

(3) Operating two aircraft on a CMI [crew, maintenance and insurance] basis (with potential for additional aircraft).

(4) Potential for additional aircraft on an ACMI [aircraft, crew, maintenance and insurance] basis both domestically and internationally.

The CMI and potential ACMI is additive to the previous agreement.

Importantly, the new agreement solidified the relationship with Amazon and eliminated the risk of an outside party operating aircraft for Amazon within Canada for up to ten years (the agreement is an initial four-year term with three successive two-year renewal options).

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