Canadian Pacific Kansas City (CP) AI Stock Analysis

• Market Cap: $107.71B
• Dividend Yield: 0.82%
• Average Volume (3M): 1.73M
• Price to Earnings (P/E): 22.4
• Beta (1Y): 0.71
• Revenue Growth: 4.02%
• EPS Growth: 21.39%
• Country: CA
• Employees: 19,992
• Sector: Industrials
• Sector Strength: 72
• Industry: Railroads
• EPS (TTM): 1.33
• Shares Outstanding: 897,958,900
• 10 Day Avg. Volume: 1,494,316
• 30 Day Avg. Volume: 1,726,703
• PEG Ratio: 1.65
• Price to Book (P/B): 2.02
• Price to Sales (P/S): 6.14
• P/FCF Ratio: 42.68
• Enterprise Value/Market Cap: 1.19
• Enterprise Value/Revenue: 8.49
• Enterprise Value/Gross Profit: 17.02
• Enterprise Value/Ebitda: 15.30
• 1Y Price Target: $124.51
• Price Target Upside: 5.15% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 16
• EPS Forecast (FY): 5.17
• Revenue Forecast (FY): $15.87B

• Rating: 70 Outperform
• Price Target: C$132.00 ▲(11.48% Upside)
• Action: Upgraded Date: 01/30/26
• Date: Action: Upgraded 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

Pan‑continental single‑line network (Canada‑US‑Mexico)

CPKC’s contiguous north‑south network is a durable competitive asset enabling long‑haul, cross‑border flows and integrated logistics services. Scale across three countries supports higher asset utilization, customer stickiness on trade lanes and structural exposure to North American supply‑chain growth.

Industry‑leading margin improvement and operating ratio gains

Sustained operating‑ratio improvement reflects productivity, network efficiency and cost control (fuel, insourcing, carbon tax elimination). Higher margins boost cash generation resilience and provide structural room for reinvestment and returns even through slower volume periods, improving long‑term profitability.

Strong operating cash flow and disciplined capital actions

Reliable OCF near $5.3B and a lower 2026 CapEx plan increase near‑term free cash available for buybacks and debt management. Combined with targeted fleet investment and synergy delivery, this supports durable financial flexibility and the ability to return capital while funding strategic reinvestment.

Negative Factors

Moderate and declining free cash‑flow conversion

FCF conversion at ~41% and a recent decline constrain the firm’s capacity to accelerate deleveraging, sustain larger buybacks or cushion downturns. The need for elevated reinvestment and timing variability in CapEx makes durable cash returns and balance‑sheet repair contingent on maintaining margin and volume gains.

Material exposure to tariffs and trade‑policy shifts

Significant tariff/headwind exposure injects structural revenue volatility into cross‑border lanes and commodity segments. Policy changes can persist for years, undermining volume and pricing predictability on key corridors and forcing costly network or commercial adjustments that impair long‑term growth visibility.

Historic operating‑profitability volatility across the cycle

Past swings in operating and EBITDA margins indicate sensitivity to one‑off events and cyclicality. Persistent volatility weakens cash‑flow predictability, complicates capital allocation and raises reliance on continued productivity gains to sustain current margin levels over multiple cycles.

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, Canada.

How the Company Makes Money

CP generates revenue primarily through the transportation of goods via its rail network. The main revenue streams include freight charges for moving bulk commodities such as grain, coal, and chemicals, as well as intermodal services that involve transporting shipping containers. The company also earns income from automotive logistics and other specialized freight services. Significant partnerships with various industries, including agriculture and manufacturing, enhance its revenue potential. Additionally, CP benefits from economies of scale and operational efficiencies, which contribute to its overall profitability.

Canadian Pacific Kansas City Financial Statement Overview

Summary

Strong and accelerating revenue growth with robust margins, supported by manageable leverage. Offsets include historical operating-profitability volatility and only mid-tier free-cash-flow conversion (FCF has recently declined despite solid earnings).

Income Statement

Revenue growth has been strong and accelerating recently (up ~16% in 2024 and ~33% in 2025). Profitability is robust with 2025 net margin around 27% and high EBITDA margin (~55%). The main weakness is volatility in operating profitability across the cycle—2023 shows unusually weak/negative operating and EBITDA margins relative to surrounding years, suggesting one-time impacts or inconsistent expense dynamics that temper the quality of the trend.

Balance Sheet

Leverage looks manageable for the business with debt-to-equity around ~0.48–0.55 in 2021–2025 and equity representing a large capital base. Returns on equity are steady but not high (roughly ~8%–9% recently), implying solid stability but not exceptional capital efficiency. Total debt has remained elevated and fairly flat (~$22–23B) while equity dipped in 2025 versus 2024, which modestly increases balance-sheet risk if growth slows.

Cash Flow

Operating cash flow is consistently positive and improving versus 2021–2023 levels (about $5.3B in 2024–2025). However, cash conversion is only moderate: free cash flow is ~41% of net income in 2025 and has declined (free cash flow down ~9% in 2025 after a small rise in 2024). This points to heavier reinvestment/capex needs and less cushion for buybacks, dividends, or rapid deleveraging compared with peak years.

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

• Technical Analysis Sentiment: Positive
• Last Price: 118.41
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

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 118.41 is above the 20-day moving average (MA) of 114.48, above the 50-day MA of 106.11, and above the 200-day MA of 105.50, indicating a bullish trend. The MACD of 4.36 indicates Negative momentum. The RSI at 71.77 is Negative, neither overbought nor oversold. The STOCH value of 83.00 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:CP.

Canadian Pacific Kansas City Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CNR	77 Outperform	$92.43B	16.73	22.24%	2.62%	0.23%	-13.22%
CP	70 Outperform	$107.71B	22.36	8.88%	0.82%	4.02%	21.39%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

Canadian Pacific Kansas City Corporate Events

CPKC launches US$1.2 billion notes offering to refinance debt

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 the parent. The deal, led by a major syndicate of U.S. and Canadian banks under an effective SEC shelf registration, is expected to close March 6, 2026, subject to customary conditions.

Net proceeds will be used primarily to refinance existing indebtedness and for general corporate purposes, with interim investment in short-term, investment-grade instruments or bank deposits. By extending its debt maturity profile and potentially lowering funding costs, CPKC is optimizing its capital structure, which could enhance financial flexibility and support ongoing operational and strategic initiatives across its North American rail network.

The most recent analyst rating on (TSE:CP) stock is a Buy with a C$134.00 price target. To see the full list of analyst forecasts on Canadian Pacific Kansas City stock, see the TSE:CP Stock Forecast page.

CPKC Bolsters Board With New Vice-Chair and Two High-Profile Directors

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 industry leader Marc Parent as a director and nominating seasoned corporate governance and banking figure Kate Stevenson for election at its April 2026 AGM, moves that broaden the board’s expertise in operations, global growth and financial oversight as CPKC continues to develop its North American rail network and support its role in continental trade and supply chains.

The most recent analyst rating on (TSE:CP) stock is a Buy with a C$124.00 price target. To see the full list of analyst forecasts on Canadian Pacific Kansas City stock, see the TSE:CP Stock Forecast page.