What are the risks and potential downside scenarios if the logistics market slows down?

Risks & Down‑side Scenarios

A slowdown in the North‑American logistics market would erode the key drivers behind Titanium’s recent earnings beat. First, a dip in freight volumes would pressure utilisation rates and compress the average rate per shipment. Because Titanium’s revenue growth (16.8% YoY in logistics) is still heavily volume‑driven, a sustained 5‑10% drop in total ton‑miles could quickly offset the benefits of its recent debt‑reduction and leave operating margins thin. A weaker macro‑environment (e.g., weaker US/Canadian GDP, tighter credit, or higher fuel costs) would also raise working‑capital needs, increasing the chance that the company’s now‑lighter balance sheet could be stressed by a higher interest‑coverage ratio if cash flow turns negative. Finally, the logistics sector is capital‑intensive; any excess capacity (e.g., new truck‑lease cycles or under‑utilised rail assets) could lead to asset‑write‑down risk and a rise in deferred revenue that may need to be re‑rated under a slower‑growth scenario.

Trading Implications

On the technical side, TTNM is trading near its 50‑day moving average and just below a previous high‑volume resistance at ~C$22.50. A break below the 200‑day SMA (~C$20.80) with increasing volume would signal the market’s perception that the logistics tailwind is fading, and could trigger a short‑term retracement of 12‑18% from recent highs. Conversely, the stock holds a support zone around C$18.00, which also aligns with the company’s adjusted EBITDA breakeven. Traders should watch the cumulative net‑new contracts and fuel‑hedge ratios in the next earnings release (Q3 2025). If forward freight‑rate expectations or capacity utilization appear to be trending downward, a tight‑stop short position just above the 200‑day SMA (≈C$21) with a stop‑loss at C$22.5 can capture downside while limiting risk. Conversely, if the company’s debt‑reduction continues to free up cash and the macro‑environment remains resilient, a buy‑the‑dip at the C$18–C$19 support level may be warranted, especially if the stock breaks above the 50‑day SMA on higher volume, indicating that the slowdown risk is being priced out.