Canadian Pacific Kansas City (CP) AI Stock Analysis

• Market Cap: $96.33B
• Dividend Yield: 0.73%
• Average Volume (3M): 1.98M
• Price to Earnings (P/E): 26.0
• Beta (1Y): 0.69
• Revenue Growth: 19.28%
• EPS Growth: 8.71%
• Country: CA
• Employees: 19,992
• Sector: Industrials
• Sector Strength: 79
• Industry: Railroads
• EPS (TTM): 4.54
• Shares Outstanding: 933,713,500
• 10 Day Avg. Volume: 1,523,679
• 30 Day Avg. Volume: 1,980,929
• PEG Ratio: 2.99
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• 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: $128.85
• Price Target Upside: 24.46% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 18

Canadian Pacific Kansas City's robust financial performance and strategic initiatives are key strengths, positioning the company well in the railroad industry. However, high valuation and bearish technical indicators present challenges. Strong earnings growth and shareholder return measures offset some macroeconomic risks, resulting in a favorable overall outlook.

Positive Factors

Earnings

Canadian Pacific Kansas City railroad posted 1Q25 EPS of C$1.06, up 7% year-year, above our C$1.01/Street’s C$1.03.

Network Expansion

The combination of CP Rail and Kansas City Southern networks significantly expands the addressable freight market for the merged entity.

Strategic Initiatives

The sale of the Panama Canal Railway Company is seen as beneficial, as it was a non-core asset and the proceeds may support share buybacks or leverage ratio improvements.

Negative Factors

Currency Impacts

Currency is also a big driver with appreciation in the CAD compared to initial guidance negatively impacting EPS growth by ~200 bps.

Trade Policy

CPKC faces potential negative impacts on auto volumes due to tariffs on non-US auto content imported from Canada and Mexico.

Volume Targets

Volumes are trending below targets in multiple areas including Intermodal, Grain, Energy, Chemicals & Plastics, and Forest Products.

Canadian Pacific Kansas City Business Overview & Revenue Model

Company Description

Canadian Pacific Kansas City (CPKC) is a leading North American transportation company formed through the merger of Canadian Pacific Railway and Kansas City Southern. Operating in the railway sector, CPKC provides freight transportation services across Canada, the United States, and Mexico. The company is known for its efficient rail network that facilitates the movement of diverse commodities such as grain, coal, automotive products, and intermodal containers, connecting major markets across the continent.

How the Company Makes Money

Canadian Pacific Kansas City generates revenue primarily through its freight transportation services. Key revenue streams include the transport of bulk commodities like grain, coal, and fertilizers, as well as merchandise such as automotive products, industrial goods, and consumer items. Intermodal transportation, which involves shipping containers that can be transferred across different modes of transport, also contributes significantly to its earnings. Additionally, CPKC benefits from strategic partnerships and network agreements that enhance its service offerings and expand its market reach. The company also leverages its real estate and logistics capabilities to support its core operations and drive additional revenue.

Canadian Pacific Kansas City Financial Statement Overview

Summary

Canadian Pacific Kansas City demonstrated strong financial performance, with a solid revenue growth rate of 15.87% and high profitability margins. The balanced debt levels and robust cash flow generation further strengthen its financial position, although there is room to improve shareholder returns.

Income Statement

Canadian Pacific Kansas City showed a strong revenue growth rate of 15.87% from 2023 to 2024, indicating robust top-line performance. The gross profit margin for 2024 was 35.60%, and the net profit margin was 25.56%, reflecting good profitability. The EBIT margin was also high at 35.60%, while the EBITDA margin stood at 51.37%. These figures suggest efficient operational management and strong profitability across the board.

Balance Sheet

The debt-to-equity ratio for 2024 was 0.48, indicating a balanced approach to leveraging debt. The return on equity (ROE) was 7.76%, which, while positive, suggests room for improvement in terms of generating returns for shareholders. The equity ratio was 54.56%, highlighting a solid equity base relative to total assets, reducing financial risk.

Cash Flow

Operating cash flow in 2024 was healthy at $5.27 billion, supporting a free cash flow to net income ratio of 0.65. The free cash flow growth rate was 46.82%, showcasing significant improvement in cash generation capabilities. The operating cash flow to net income ratio of 1.42 indicates strong cash conversion from earnings.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
14.55B	12.55B	8.81B	8.00B	7.71B
	Gross Profit
5.18B	6.38B	4.59B	4.42B	4.36B
	EBIT
5.18B	4.39B	4.80B	3.21B	3.31B
	EBITDA
7.48B	-731.00M	4.58B	4.85B	4.44B
	Net Income Common Stockholders
3.72B	3.93B	3.52B	2.85B	2.44B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
739.00M	464.00M	451.00M	69.00M	147.00M
	Total Assets
87.74B	80.39B	73.50B	68.18B	23.64B
	Total Debt
22.99B	22.84B	19.65B	20.13B	9.77B
	Net Debt
22.25B	22.37B	19.20B	20.06B	9.62B
	Total Liabilities
38.85B	37.98B	34.61B	34.35B	16.32B
	Stockholders Equity
47.89B	41.49B	38.89B	33.83B	7.32B
Cash Flow		Free Cash Flow
2.41B	1.64B	2.58B	2.16B	1.13B
	Operating Cash Flow
5.27B	4.14B	4.14B	3.69B	2.80B
	Investing Cash Flow
-2.80B	-2.16B	-1.50B	-13.73B	-2.03B
	Financing Cash Flow
-2.25B	-1.96B	-2.30B	9.94B	-764.00M

Canadian Pacific Kansas City Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 103.53
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• 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 Neutral. The current price of 103.53 is above the 20-day moving average (MA) of 100.80, below the 50-day MA of 104.18, and below the 200-day MA of 108.30, indicating a neutral trend. The MACD of -0.71 indicates Negative momentum. The RSI at 54.22 is Neutral, neither overbought nor oversold. The STOCH value of 57.59 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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	74 Outperform	$96.33B	26.02	7.62%	0.73%	19.28%	8.71%
CNR	74 Outperform	$87.81B	19.97	21.72%	2.43%	1.30%	-18.15%
Sector *	64 Neutral	$4.28B	11.80	5.33%	250.46%	4.10%	-9.26%
TFII	63 Neutral	$9.59B	18.00	14.78%	2.07%	16.00%	-17.63%

Canadian Pacific Kansas City Corporate Events

CPKC Announces 2025 Director Election Results and Shareholder Approvals

Canadian Pacific Kansas City announced the results of its 2025 annual meeting, where all 12 director nominees were elected with at least 97% of votes. Isabelle Courville was re-appointed as Chair of the Board. The advisory votes on executive compensation and climate change received 87.74% and 91.66% approval, respectively, while Ernst & Young LLP was appointed as auditor with 99.61% approval. These results reflect strong shareholder support for CPKC’s leadership and strategic direction, potentially strengthening its industry position and stakeholder confidence.

Spark’s Take on TSE:CP Stock

According to Spark, TipRanks’ AI Analyst, TSE:CP is a Outperform.

Canadian Pacific Kansas City exhibits strong financial performance and strategic growth initiatives. However, bearish technical signals and high valuation present challenges. Positive earnings call and corporate events contribute to a favorable outlook, but valuation concerns and technical weaknesses weigh on the overall score.

To see Spark’s full report on TSE:CP stock, click here.

Canadian Pacific Kansas City Reports Robust Q1 2025 Results Amid Market Challenges

Canadian Pacific Kansas City reported strong first-quarter results for 2025, with revenues reaching $3.8 billion and a notable increase in earnings per share. The company attributes its success to precision execution and a resilient network amidst challenging market conditions. Despite uncertainties in trade policies and economic recession risks, CPKC maintains a positive long-term outlook, adjusting its earnings guidance to reflect these challenges while continuing to prioritize safety and efficiency in its operations.

Spark’s Take on TSE:CP Stock

According to Spark, TipRanks’ AI Analyst, TSE:CP is a Outperform.

Canadian Pacific Kansas City exhibits strong financial performance, effective strategic initiatives, and positive earnings outlook. However, the technical analysis indicates bearish trends, and the high P/E ratio raises valuation concerns. The company’s strategic corporate events support growth and financial strength, balancing the challenges in market segments and valuation pressures.

To see Spark’s full report on TSE:CP stock, click here.

CPKC Boosts Dividend by 20% Following Successful Merger

Canadian Pacific Kansas City (CPKC) announced a 20% increase in its quarterly dividend, raising it to $0.228 per share. This decision reflects the company’s commitment to returning cash to shareholders and follows the successful merger of Canadian Pacific and Kansas City Southern. The increase highlights the strength of CPKC’s operating model and its focus on creating shareholder value.

Spark’s Take on TSE:CP Stock

According to Spark, TipRanks’ AI Analyst, TSE:CP is a Outperform.

Canadian Pacific Kansas City exhibits strong financial health and growth prospects, supported by robust revenue growth and effective operational strategies. However, technical indicators suggest a bearish trend, and the stock’s high valuation could be a concern. Recent strategic initiatives and a positive earnings call outlook contribute positively but are counterbalanced by existing market challenges.

To see Spark’s full report on TSE:CP stock, click here.

CPKC Sells Panama Canal Railway to APM Terminals

Canadian Pacific Kansas City (CPKC) and Lanco Group/Mi-Jack have sold the Panama Canal Railway Company (PCRC) to APM Terminals, a division of A.P. Moller – Maersk. This sale aligns with CPKC’s strategy to optimize its assets and focus on its core North American rail business. The transaction is expected to create value for shareholders and enhance APM Terminals’ service offerings in the region, leveraging PCRC’s operational excellence to expand intermodal container movement services.

CPKC Announces $1.2 Billion Debt Offering to Strengthen Financial Position

Canadian Pacific Kansas City Limited announced a US $1.2 billion debt offering through its subsidiary, Canadian Pacific Railway Company. The proceeds from this offering, which includes $600 million of 4.800% Notes due 2030 and $600 million of 5.200% Notes due 2035, will be used mainly for refinancing existing debt and general corporate purposes. This financial move is expected to strengthen CPKC’s financial position and provide flexibility for future operations.