Canadian Pacific Kansas City, the Industrials sector company, was revisited by a Wall Street analyst yesterday. Analyst Fadi Chamoun from BMO Capital reiterated a Buy rating on the stock and has a C$129.00 price target.
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Fadi Chamoun has given his Buy rating due to a combination of factors that highlight Canadian Pacific Kansas City’s (CPKC) strong growth prospects and operational excellence. The merger of CP and Kansas City Southern has opened up a significant addressable market, providing opportunities for substantial organic volume growth over the next decade. This expansion is supported by CPKC’s extensive land bank, which enhances its ability to meet customer supply chain needs.
Furthermore, CPKC’s unique supply chain solutions and best-in-class operational execution position it as a leading growth story in the transportation sector. The company has demonstrated growth that surpasses the rail industry since the merger, with projections indicating a revenue synergy run rate of approximately $1.1 billion by the end of 2025. Additionally, CPKC’s strong free cash flow conversion and limited capital expenditure pressures suggest that it will continue to deliver robust financial performance, making its valuation attractive in the context of its growth and cash flow capabilities.
In another report released on July 10, Scotiabank also maintained a Buy rating on the stock with a C$120.00 price target.