Canadian Pacific Kansas City (CP) AI Stock Analysis

• Market Cap: $89.45B
• Dividend Yield: 0.86%
• Average Volume (3M): 1.47M
• Price to Earnings (P/E): 21.6
• Beta (1Y): 0.77
• Revenue Growth: 4.02%
• EPS Growth: 21.39%
• Country: CA
• Employees: 19,992
• Sector: Industrials
• Sector Strength: 72
• Industry: Railroads
• EPS (TTM): 1.10
• Shares Outstanding: 900,831,240
• 10 Day Avg. Volume: 1,529,376
• 30 Day Avg. Volume: 1,474,219
• 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: 1.33
• Enterprise Value/Revenue: 7.97
• Enterprise Value/Gross Profit: 16.56
• Enterprise Value/Ebitda: 14.66
• 1Y Price Target: $127.30
• Price Target Upside: 27.98% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 16
• EPS Forecast (FY): 4.68
• Revenue Forecast (FY): $15.20B

• Rating: 71 Outperform
• Price Target: C$110.00 ▲(10.59% Upside)

Canadian Pacific Kansas City's overall stock score is driven by strong financial performance and positive earnings call insights, indicating robust growth and strategic positioning. However, technical analysis shows bearish trends, and valuation metrics suggest a balanced view. The mixed sentiment from the earnings call, along with macroeconomic challenges, tempers the overall outlook.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong market demand and effective business operations, supporting long-term financial stability.

Operational Efficiency

Improved operational efficiency reflects better cost management and resource utilization, enhancing profitability and competitive positioning.

Safety Improvements

Enhanced safety metrics reduce operational risks and costs, contributing to sustainable operations and long-term business resilience.

Negative Factors

Gross Profit Margin Decline

Declining gross profit margins suggest rising costs or pricing pressures, potentially impacting future profitability and financial health.

Intermodal Pricing Pressure

Pricing pressure in intermodal services could affect revenue growth and margins, challenging the company's competitive edge in this segment.

Macro and Trade Policy Headwinds

Ongoing macroeconomic and trade challenges may hinder growth and operational performance, affecting long-term strategic objectives.

Canadian Pacific Kansas City Business Overview & Revenue Model

Company Description

Canadian Pacific Kansas City (CP) is a major North American railway company formed from the merger of Canadian Pacific Railway and Kansas City Southern. Operating across Canada and the United States, CP provides freight transportation services to various sectors, including agriculture, automotive, energy, and intermodal services. The company is known for its efficient rail operations, which facilitate the movement of goods across a vast network, connecting key markets and industries.

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: Negative
• Last Price: 99.47
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CP, the sentiment is Negative. The current price of 99.47 is below the 20-day moving average (MA) of 103.64, below the 50-day MA of 104.27, and below the 200-day MA of 106.16, indicating a bearish trend. The MACD of -1.77 indicates Positive momentum. The RSI at 37.34 is Neutral, neither overbought nor oversold. The STOCH value of 16.17 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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	71 Outperform	$89.45B	21.58	9.32%	0.86%	4.02%	21.39%
CNR	71 Outperform	$83.31B	18.12	22.24%	2.61%	0.23%	-13.22%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
TFII	63 Neutral	C$10.03B	22.45	11.98%	2.01%	-0.25%	-28.71%

Canadian Pacific Kansas City Corporate Events

CPKC Reports Strong Q3 2025 Financial Results

Canadian Pacific Kansas City Limited (CPKC) is a transnational railway company that operates a vast network spanning Canada, the United States, and Mexico, providing freight transportation services and logistics solutions to key markets across North America.

CPKC Reports Robust Q3 2025 Results Amid Economic Challenges

Canadian Pacific Kansas City (CPKC) reported strong third-quarter results for 2025, with revenues reaching $3.7 billion and a significant increase in earnings per share. The company demonstrated resilience amid challenging economic conditions, achieving a 5% increase in volumes and a 3% rise in revenues compared to the previous year. CPKC’s strategic focus on leveraging its North American footprint and maintaining strong service delivery has contributed to its continued growth and market expansion. The company also reported improvements in safety metrics, with decreases in personal injury and train accident frequencies, underscoring its commitment to operational excellence.

The most recent analyst rating on (TSE:CP) stock is a Buy with a C$118.00 price target. To see the full list of analyst forecasts on Canadian Pacific Kansas City stock, see the TSE:CP Stock Forecast page.

Canadian Pacific Kansas City Announces Quarterly Dividend

Canadian Pacific Kansas City Limited has announced a quarterly dividend of $0.228 per share, payable on January 26, 2026, to shareholders of record as of December 31, 2025. This declaration underscores CPKC’s commitment to delivering shareholder value and reflects its strong financial position, further solidifying its status as a key player in the North American rail industry.

The most recent analyst rating on (TSE:CP) stock is a Buy with a C$118.00 price target. To see the full list of analyst forecasts on Canadian Pacific Kansas City stock, see the TSE:CP Stock Forecast page.

CPKC 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.