Canadian Pacific Kansas City (CP) AI Stock Analysis

• Market Cap: C$104.71B
• Dividend Yield: 0.82%
• Average Volume (3M): 1.72M
• Price to Earnings (P/E): 22.4
• Beta (1Y): 0.75
• 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: 1,625,155
• 30 Day Avg. Volume: 1,720,631
• 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: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$124.89
• Price Target Upside: 10.83% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 16
• EPS Forecast (FY): 5.17
• Revenue Forecast (FY): C$15.87B

• Rating: 70 Outperform
• Price Target: C$124.00 ▲(10.04% 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

Cross-border single-line network

CPKC’s integrated Canada–U.S.–Mexico single‑line network is a durable competitive asset that supports north–south long‑haul trade. That scale and connectivity underpin recurring long‑haul volumes, routing advantage, and integrated logistics services that sustain revenue and pricing power over multiple quarters.

Operating‑ratio and margin improvement

Consistent OR and margin improvement reflects lasting productivity gains (train weight, speed, locomotive productivity) and cost control like lower fuel and insourcing. Higher structural operating efficiency increases cash flow durability and creates runway for continued margin expansion and reinvestment over the next several quarters.

Intermodal momentum and partnerships

Rising intermodal volumes and strategic services (MMX, SMX with CSX, Americold) diversify revenue beyond bulk commodities into secular container/warehouse logistics growth. These partnerships expand service offerings, improve network utilization, and support sustainable volume and revenue growth across trade lanes.

Negative Factors

Weak free‑cash‑flow conversion

FCF conversion near 41% and a recent decline signal that earnings do not fully convert to discretionary cash due to heavy reinvestment and timing. That constrains durable capacity for buybacks, dividends, or aggressive deleveraging absent sustained cash‑flow improvement over coming quarters.

Elevated, fairly flat debt

Stable but high absolute debt levels combined with a dip in equity modestly raise balance‑sheet risk if growth slows. This limits financial flexibility for large M&A or rapid capital returns and increases sensitivity to operational setbacks or cyclical revenue pressure over the medium term.

Tariff and trade‑policy uncertainty

Trade policy and tariffs have caused material revenue hits (~$200M+), notably in forest products and segments like automotive. Such regulatory and trade volatility is a persistent structural risk that can depress volumes, disrupt routing and pricing, and complicate multi‑quarter planning and revenue visibility.

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: 112.69
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• 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 112.69 is below the 20-day moving average (MA) of 115.58, above the 50-day MA of 106.71, and above the 200-day MA of 105.54, indicating a bullish trend. The MACD of 3.76 indicates Positive momentum. The RSI at 59.49 is Neutral, neither overbought nor oversold. The STOCH value of 45.14 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
CNR	77 Outperform	C$91.70B	16.73	22.24%	2.62%	0.23%	-13.22%
CP	70 Outperform	C$104.71B	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.