Air Transport Service Group (NSDQ: ATSG) is getting ready to take flight. The operator and lessor of cargo planes just signed a contract with Amazon to shuttle a portion of its packages across the U.S. In a move to cement Air Transport’s position as its preferred air partner, Amazon has been granted warrants to purchase up to 19.9% of Air Transport’s stock over the next five years.

While the 20 planes currently under agreement will ignite earnings in 2017, it is quite likely that Amazon will expand the agreement in its effort to control and dominate the next day shipping its customers have grown to expect. For comparison’s sake, Air Transport’s largest customer, DHL, currently employs just 17 planes and makes up 46% of revenue.

Management has conservatively guided to flat earnings in 2016 as it builds out its capacity to handle the demand from Amazon. As the planes are deployed, earnings will skyrocket 40%. Even after the 22% surge in price since the announcement of the deal, Air Transport could see its stock double on the back of Amazon’s growth.

Look for details of my analysis in Profit Catalyst Alert  newsletter published April 19.

Target Price: $28