Canadian Pacific Kansas City (CP) AI Stock Analysis

• Market Cap: $97.39B
• Dividend Yield: 0.79%
• Average Volume (3M): 1.72M
• Price to Earnings (P/E): 23.6
• Beta (1Y): 0.77
• Revenue Growth: 4.77%
• EPS Growth: 20.28%
• Country: CA
• Employees: 19,992
• Sector: Industrials
• Sector Strength: 72
• Industry: Railroads
• EPS (TTM): 1.12
• Shares Outstanding: 917,976,300
• 10 Day Avg. Volume: 1,296,295
• 30 Day Avg. Volume: 1,717,859
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.26
• Enterprise Value/Revenue: 8.21
• Enterprise Value/Gross Profit: 17.05
• Enterprise Value/Ebitda: 15.10
• 1Y Price Target: $126.06
• Price Target Upside: 18.65% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 17

• Rating: 76 Outperform
• Price Target: C$121.00 ▲(13.89% Upside)

Canadian Pacific Kansas City's strong financial performance and positive technical indicators are the primary drivers of its stock score. While the valuation is moderate, the company's robust revenue growth and strategic initiatives support its growth trajectory. The absence of significant corporate events or earnings call impact further solidifies the current assessment.

Positive Factors

Revenue Growth

The robust revenue growth rate of 64.8% indicates significant expansion and market penetration, supporting long-term business sustainability and competitive positioning.

Strategic Partnerships

Strategic partnerships like the Gemini alliance enhance service offerings and market reach, fostering long-term growth and strengthening competitive advantages.

Operational Efficiency

Operational improvements, including enhanced train efficiency and safety metrics, contribute to cost savings and reliability, bolstering long-term operational success.

Negative Factors

System Integration Challenges

Integration challenges can disrupt operations and increase costs, potentially hindering efficiency and profitability in the medium term.

Pricing and Revenue Mix Challenges

Challenges in pricing and revenue mix can affect margins and profitability, posing risks to financial performance if not addressed strategically.

Trade Policy Uncertainties

Trade policy uncertainties can lead to volume fluctuations and operational unpredictability, impacting long-term planning and revenue stability.

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 freight across its extensive rail network. The company earns money by charging customers for shipping various goods, which include bulk commodities (like grain and coal), merchandise (such as automobiles and consumer goods), and intermodal containers. Key revenue streams are derived from long-term contracts with large shippers and spot market transactions. Additionally, CP may benefit from strategic partnerships with other transportation and logistics companies that enhance its service offerings and market reach. Economic factors, such as demand for freight services and fuel prices, also play a significant role in influencing the company's earnings.

Canadian Pacific Kansas City Financial Statement Overview

Summary

Canadian Pacific Kansas City demonstrates strong financial health with robust revenue growth and profitability. The balance sheet is well-managed with moderate leverage, and cash flow generation is solid. However, declining gross profit margins and fluctuating free cash flow growth pose some risks.

Income Statement

Canadian Pacific Kansas City shows strong revenue growth with a TTM (Trailing-Twelve-Months) growth rate of 64.8%, indicating robust expansion. The company maintains healthy profitability with a gross profit margin of 40.53% and a net profit margin of 28.04%. EBIT and EBITDA margins are also strong at 41.26% and 54.38%, respectively, reflecting efficient operations. However, the gross profit margin has decreased from previous years, suggesting potential cost pressures.

Balance Sheet

The balance sheet is stable with a manageable debt-to-equity ratio of 0.48, indicating prudent leverage. Return on equity stands at 8.97%, showing effective use of equity to generate profits. The equity ratio is solid, reflecting a strong capital structure. However, the return on equity has slightly decreased from previous years, which could indicate challenges in maintaining profitability growth.

Cash Flow

Cash flow metrics are positive, with a free cash flow growth rate of 6.2% in the TTM, indicating improved cash generation. The operating cash flow to net income ratio of 1.45 suggests strong cash conversion efficiency. The free cash flow to net income ratio is 0.46, reflecting good cash flow relative to earnings. However, the free cash flow growth has been volatile in past years, which could pose risks.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	14.92B	14.55B	12.55B	8.81B	8.00B	7.71B
Gross Profit	7.18B	7.54B	6.44B	4.59B	4.59B	4.43B
EBITDA	8.11B	7.47B	-739.00M	5.65B	4.87B	4.44B
Net Income	4.18B	3.72B	3.93B	3.52B	2.85B	2.44B
Balance Sheet
Total Assets	85.18B	88.40B	80.39B	73.75B	68.35B	23.82B
Cash, Cash Equivalents and Short-Term Investments	799.00M	739.00M	464.00M	451.00M	82.00M	147.00M
Total Debt	22.27B	22.99B	22.84B	19.92B	20.41B	10.08B
Total Liabilities	38.03B	39.51B	37.98B	34.86B	34.52B	16.50B
Stockholders Equity	46.20B	47.89B	41.49B	38.89B	33.83B	7.32B
Cash Flow
Free Cash Flow	2.50B	2.41B	1.64B	2.58B	2.16B	1.13B
Operating Cash Flow	5.49B	5.27B	4.14B	4.14B	3.69B	2.80B
Investing Cash Flow	-2.49B	-2.80B	-2.16B	-1.50B	-13.73B	-2.03B
Financing Cash Flow	-2.74B	-2.25B	-1.96B	-2.30B	9.94B	-764.00M

Canadian Pacific Kansas City Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 106.24
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: 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 106.24 is above the 20-day moving average (MA) of 106.05, above the 50-day MA of 104.68, and below the 200-day MA of 106.53, indicating a neutral trend. The MACD of 0.63 indicates Positive momentum. The RSI at 51.43 is Neutral, neither overbought nor oversold. The STOCH value of 44.41 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 Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CP	76 Outperform	$97.39B	23.64	9.10%	0.79%	4.77%	20.28%
CNR	69 Neutral	$83.91B	18.50	21.83%	2.61%	0.63%	-14.20%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
TFII	63 Neutral	$10.86B	20.62	13.80%	2.04%	6.04%	-20.31%

Canadian Pacific Kansas City Corporate Events

CPKC Reports Strong Q2 2025 Despite Challenges

The recent earnings call for Canadian Pacific Kansas City Limited (CPKC) painted a picture of a robust quarter, marked by significant volume growth, increased earnings, and notable improvements in safety and operating ratio. However, the company also faced challenges, particularly with systems integration in the Southern U.S., which affected earnings, and increased terminal dwell times. Business segments such as potash and automotive experienced mixed impacts, reflecting the complexity of the current market environment.

Canadian Pacific Kansas City Reports Strong Q2 Growth

Canadian Pacific Kansas City Limited (CPKC) is a transcontinental freight railway company linking Canada, the United States, and Mexico, providing rail and intermodal transportation services across a 20,000-mile network. In its second-quarter earnings report for 2025, CPKC announced a revenue increase to $3.7 billion, with diluted earnings per share (EPS) rising to $1.33. The company highlighted its strong operational performance despite challenges in the southern U.S. network. Key financial metrics showed a 7% increase in volumes and a 3% rise in revenues compared to the previous year. The operating ratio improved, and both reported and core adjusted EPS saw significant growth. The company also reported a decrease in personal injury frequency but an increase in train accident frequency. Looking ahead, CPKC remains confident in achieving its full-year guidance and sustainable growth, leveraging its unique three-nation network to support customer expansion into new markets.

CPKC Reports Strong Q2 2025 Growth and Operational Efficiency

Canadian Pacific Kansas City reported strong financial performance in the second quarter of 2025, with revenues reaching $3.7 billion and a notable increase in diluted earnings per share. The company overcame challenges in its southern U.S. network and achieved a seven percent increase in volumes, reflecting its strategic execution and market expansion efforts. CPKC’s improved operating ratio and reduced personal injury frequency highlight its operational efficiency and commitment to safety. The company remains confident in achieving its full-year guidance, driven by opportunities within its extensive North American network.

The most recent analyst rating on (TSE:CP) stock is a Buy with a C$133.00 price target. To see the full list of analyst forecasts on Canadian Pacific Kansas City stock, see the TSE:CP Stock Forecast page.

CPKC Declares Quarterly Dividend, Strengthening Shareholder Value

Canadian Pacific Kansas City Limited has announced a quarterly dividend of $0.228 per share on its outstanding common shares, payable on October 27, 2025, to shareholders of record as of September 26, 2025. This decision reflects the company’s commitment to providing value to its shareholders and may enhance its attractiveness to investors, potentially impacting its market positioning positively.

The most recent analyst rating on (TSE:CP) stock is a Buy with a C$127.00 price target. To see the full list of analyst forecasts on Canadian Pacific Kansas City stock, see the TSE:CP Stock Forecast page.