Canadian Pacific Kansas City (TSE:CP)
TSX:CP
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Canadian Pacific Kansas City
(TSX:CP)
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Rating:70Outperform
Price Target:
C$123.00
â–²(10.17% Upside)
Action:UpgradedDate:01/30/26
The score is driven primarily by strong financial performance (growth and margins) and a supportive earnings outlook (EPS growth, margin improvement, and buybacks). These positives are tempered by moderate/declining recent free-cash-flow conversion and a mixed technical picture with negative MACD and price below the 200-day average.
Positive Factors
Revenue & margin strength
Sustained double‑digit top‑line gains and very healthy EBITDA/net margins indicate durable pricing power and highly efficient network utilization. This underpins long‑term cash generation, funds reinvestment into fleet and terminals, and supports continued margin expansion if execution remains consistent.
Negative Factors
Subpar free‑cash‑flow conversion
Lower and falling FCF conversion signals heavier reinvestment and/or working‑capital absorption, constraining the company’s ability to rapidly deleverage, expand buybacks or increase dividends. Sustained subpar conversion reduces resilience to cyclical revenue shocks over multiple quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Revenue & margin strength
Sustained double‑digit top‑line gains and very healthy EBITDA/net margins indicate durable pricing power and highly efficient network utilization. This underpins long‑term cash generation, funds reinvestment into fleet and terminals, and supports continued margin expansion if execution remains consistent.
Read all positive factors
Canadian Pacific Kansas City (CP) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$99.99B
Dividend Yield0.82%
Average Volume (3M)1.36M
Price to Earnings (P/E)22.4
Beta (1Y)0.75
Revenue Growth4.02%
EPS Growth21.39%
CountryCA
Employees19,992
SectorIndustrials
Sector Strength72
IndustryRailroads
Share Statistics
EPS (TTM)1.33
Shares Outstanding897,754,500
10 Day Avg. Volume1,063,537
30 Day Avg. Volume1,364,674
Financial Highlights & Ratios
PEG Ratio1.65
Price to Book (P/B)2.02
Price to Sales (P/S)6.14
P/FCF Ratio42.68
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$126.40Price Target Upside13.21% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering14
EPS Forecast (FY)5.14
Revenue Forecast (FY)C$15.97B
Canadian Pacific Kansas City Business Overview & Revenue Model
Company Description
Canadian Pacific Kansas City Ltd. engages in the provision of rail freight transportation services. It offers rail services linking Canada, the United States and Mexico. The company was founded on June 22, 2001, and is headquartered in Calgary, Ca...
How the Company Makes Money
CPKC primarily makes money by charging customers to move freight by rail across its network. Revenue is generated through freight transportation rates (and related accessorial charges) across several major traffic categories, including: (1) bulk a...
Canadian Pacific Kansas City Earnings Call Summary
Earnings Call Date:Jan 28, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 29, 2026
Earnings Call Sentiment Positive
The call emphasized multiple operational and financial positives: year-over-year revenue and EPS growth, industry‑leading improvements in operating ratio, record operational metrics and safety achievements, a record grain crop and tangible intermodal momentum (MMX, SMX, Americold) that underpin mid-single-digit RTM growth and low double-digit EPS guidance for 2026. Management also highlighted strong cash generation, ongoing fleet investment and synergy progress. Offsetting these positives are near-term headwinds: tariff-related revenue impacts (~$200M+), segment-specific softness (notably forest products and parts of ECP and automotive), export delays from weather and a Q4 increase in personal injuries. Management expects a tougher Q1 but sees rate and volume tailwinds later in the year. Overall, positives (structural operational gains, growth catalysts, cash returns and margin improvement) outweigh the near-term and segmental challenges.Positive Updates
Quarterly Revenue and EPS Growth
Q4 revenue of $3.9 billion, up 1% year-over-year; core adjusted diluted EPS of $1.33, up 3% year-over-year.
Negative Updates
Segment Weaknesses and Tariff Impact
Tariff-related and trade-policy headwinds noted as a significant drag (management referenced roughly $200 million+ of revenue impact). Forest Products revenue declined 13% (volumes down 12%) due largely to tariffs on Canadian lumber exports to the U.S.
Read all updates
Q4-2025 Updates
Positive
Negative
Quarterly Revenue and EPS Growth
Q4 revenue of $3.9 billion, up 1% year-over-year; core adjusted diluted EPS of $1.33, up 3% year-over-year.
Read all positive updates
Company Guidance
CPKC guided to mid‑single‑digit RTM (volume) growth in 2026 and low‑double‑digit core EPS growth, with continued margin improvement and an expectation of ongoing operating‑ratio gains (management cited a long‑term ~100 bps OR improvement per year if execution continues); they forecast a 2026 core adjusted effective tax rate of ~24.75%, plan ~$2.65 billion of CapEx (a ~15% reduction vs prior outlook), will add 100 Tier‑IV locomotives in 2026 (after 100 delivered in 2025), launched a new 5% share‑repurchase program, and target strong free‑cash conversion (near 75% in the near term, with a longer‑term ~90% goal); these 2026 targets build on 2025 results of $15.1 billion revenue (+4%), 4% volume growth, a core adjusted OR of 59.9% (140 bps improvement) and core EPS of $4.61 (+8%).Canadian Pacific Kansas City Financial Statement Overview
Summary
Income Statement
83
Very Positive
Balance Sheet
78
Positive
Cash Flow
66
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 15.08B | 14.55B | 12.55B | 8.81B | 8.00B |
| Gross Profit | 6.08B | 7.54B | 6.44B | 4.59B | 4.59B |
| EBITDA | 8.37B | 7.47B | -739.00M | 5.65B | 4.87B |
| Net Income | 4.14B | 3.72B | 3.93B | 3.52B | 2.85B |
Balance Sheet | |||||
| Total Assets | 85.94B | 88.40B | 80.39B | 73.75B | 68.35B |
| Cash, Cash Equivalents and Short-Term Investments | 184.00M | 739.00M | 464.00M | 451.00M | 82.00M |
| Total Debt | 23.19B | 22.99B | 22.84B | 19.92B | 20.41B |
| Total Liabilities | 39.12B | 39.51B | 37.98B | 34.86B | 34.52B |
| Stockholders Equity | 45.88B | 47.89B | 41.49B | 38.89B | 33.83B |
Cash Flow | |||||
| Free Cash Flow | 2.17B | 2.41B | 1.64B | 2.58B | 2.16B |
| Operating Cash Flow | 5.31B | 5.27B | 4.14B | 4.14B | 3.69B |
| Investing Cash Flow | -2.67B | -2.80B | -2.16B | -1.50B | -13.73B |
| Financing Cash Flow | -3.15B | -2.25B | -1.96B | -2.30B | 9.94B |
Canadian Pacific Kansas City Technical Analysis
Positive
111.65
Price Trends
112.54
Negative
106.72
Positive
105.29
Positive
Market Momentum
0.14
Negative
51.90
Neutral
42.85
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CP, the sentiment is Positive. The current price of 111.65 is above the 20-day moving average (MA) of 110.31, below the 50-day MA of 112.54, and above the 200-day MA of 105.29, indicating a neutral trend. The MACD of 0.14 indicates Negative momentum. The RSI at 51.90 is Neutral, neither overbought nor oversold. The STOCH value of 42.85 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:CP.
Canadian Pacific Kansas City Risk Analysis
Canadian Pacific Kansas City disclosed 25 risk factors in its most recent earnings report. Canadian Pacific Kansas City reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Canadian Pacific Kansas City Peers Comparison
UnderperformOutperform
Sector (63)
TSE:CP
Canadian Pacific Kansas City
111.65
11.34
11.31%
TSE:CNR
Canadian National Railway
151.16
18.13
13.63%
Canadian Pacific Kansas City Corporate Events
Business Operations and StrategyPrivate Placements and Financing
CPKC launches US$1.2 billion notes offering to refinance debt
Positive
Mar 5, 2026
Canadian Pacific Kansas City has launched a US$1.2 billion debt offering through its Canadian Pacific Railway Company subsidiary, split between US$600 million of 4.000% notes due 2029 and US$600 million of 5.500% notes due 2056, all guaranteed by ...
Business Operations and StrategyExecutive/Board Changes
CPKC Bolsters Board With New Vice-Chair and Two High-Profile Directors
Positive
Jan 29, 2026
Canadian Pacific Kansas City has strengthened its board leadership as part of ongoing succession planning, appointing veteran rail executive and long-time director Gordon Trafton as vice-chair of the board. The company is also adding aerospace ind...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.