When a highly respected analyst says a company is his “best idea,” it’s worth paying attention.
That’s how James McGarragle of RBC Capital Markets referred to Halifax-based Chorus Aviation Inc. CHR-T after the release of its second-quarter results last month.
He described Chorus as a “compelling value opportunity with significant growth catalysts” and raised his target price for the stock by $4 to $39 a share.
I had not looked closely at the stock, so I did some research. Here’s what I found.
Background: Most Canadians have never heard of Chorus or know what it does. But anyone who travels is probably familiar with Jazz, the largest regional airline in Canada, which operates under the Air Canada Express brand. Chorus owns Jazz. It also owns Voyageur Aviation, a provider of specialty charter, aircraft modifications, parts provisioning, and in-service support services.
Other aspects of its business are Cygnet Aviation Academy, an accredited training academy preparing pilots for direct entry into airlines, and Elisen & Associates, a provider of aerospace engineering and certification services.
Performance: The stock has been trading in the red for most of the past five years. It has been performing much better this year, however, with a gain of about 30 per cent since Jan. 1.
Recent developments: The company reported strong second-quarter results. Operating revenue was $349.4-million, up 7.6 per cent from $324.6-million in the same period last year.
Adjusted net income was $19.1 million (83 cents a share) compared to $14.1 million (54 cents a share) for the second quarter of 2025. For the first six months of 2026, adjusted net income was $31.7-million, a gain of 7.6 per cent from $29.4-million the year before.
Adjusted EBITDA was $50.7-million in the second quarter, a decrease of $600,000 compared with the second quarter of 2025.
Dividend and buybacks: The shares pay a quarterly dividend of 11 cents (44 cents a year) to yield 1.6 per cent at the current price of $28.07. But investors should be aware that in 2020, Chorus cut its dividend from 28 cents a quarter to zero. It was reinstated at eight cents a share in July, 2025, and raised to the current level in March of this year.
The company is also buying back stock under its normal course issuer bid. During the second quarter, Chorus purchased and cancelled 616,891 common shares at a weighted average price of $23.97 per share for a cost of $14.8-million.
Acquisition: Chorus completed the acquisition of Kadex Aero Supply Ltd. on April 1, 2026. During the second quarter, Kadex contributed revenue of $16.4-million and net income of $1.2-million.
Risks: There are several to consider.
Tariffs. The company has dodged the Trump tariff bullet so far, but it’s been close. Earlier this year, the U.S. President threatened a 50-per-cent tariff on Canadian-built aircraft and vowed to decertify Canadian planes operating in the U.S. amid a certification dispute involving American-made Gulfstream jets. The Gulfstream issue was resolved but the U.S. Commerce Department issued a report that was critical of “foreign reliance” on aircraft parts. Only intensive lobbying by the airline industry prevented the introduction of tariffs on foreign-made jets or parts.
Now Mr. Trump is suggesting he might ban Bombardier BBD-B-T from selling its planes in the U.S. That could lead to other actions that could have an impact on Chorus. The company has warned of the possibility in its financial statements.
Air Canada contract. The current contract with Air Canada AC-T runs until 2035, so there is no immediate concern there. But any development that affects airline profitability (e.g., fuel price increases, decline in passenger traffic) could have a negative impact on the bottom line.
Labour relations. This is always a concern in the airline business. Jazz announced just this week that it had reached a tentative agreement with the Canadian Flight Attendant Union following a 99 per cent strike mandate vote by more than 1,000 flight attendants who had been working without a contract since Jan. 1. However, it should be noted that labour issues normally have only a short-term impact on share prices.
Action now: Chorus is a buy for aggressive investors seeking capital gains and modest cash flow. Conservative investors may be put off by the historic volatility of the shares and the ever-present tariff threat.
Gordon Pape is editor and publisher of the Internet Wealth Builder and Income Investor newsletters.