Canadian Pacific Kansas City (CP) AI Stock Analysis

• Market Cap: $102.33B
• Dividend Yield: 0.68%
• Average Volume (3M): 1.58M
• Price to Earnings (P/E): 24.2
• Beta (1Y): 0.77
• Revenue Growth: 19.28%
• EPS Growth: 8.71%
• Country: CA
• Employees: 19,992
• Sector: Industrials
• Sector Strength: 93
• Industry: Railroads
• EPS (TTM): 1.06
• Shares Outstanding: 930,456,050
• 10 Day Avg. Volume: 1,597,318
• 30 Day Avg. Volume: 1,582,889
• PEG Ratio: 6.58
• Price to Book (P/B): 1.98
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 40.38
• 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: $126.33
• Price Target Upside: 14.87% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 18

• Rating: 75 Outperform
• Price Target: C$115.00 ▲( 4.56% Upside)

Canadian Pacific Kansas City's stock is supported by strong financial performance and positive earnings call highlights, indicating robust operational efficiency and growth prospects. However, the high valuation and bearish technical signals present challenges. The recent corporate events contribute positively, balancing the valuation concerns and technical weaknesses.

Positive Factors

Dividend and Buyback

Management increased the quarterly dividend by 20% and expects to finish its buyback by year end.

Operational Performance

CP delivered record daily GTMs in March for the combined company, reflecting operational resilience.

Strategic Moves

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 Impact

Appreciation in the CAD compared to initial guidance negatively impacts EPS growth by approximately 200 basis points.

Earnings Guidance

The company lowered its core adjusted EPS growth target to 10%-14% from 12%-18% due to economic and trade policy uncertainties.

Volume Trends

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's financial performance is robust, marked by strong profitability, stable revenue growth, and efficient cash flow generation. The balance sheet reflects moderate leverage and a strong equity position, supporting long-term financial health. Despite minor fluctuations in free cash flow, the overall trajectory is positive, bolstering the company's financial resilience.

Income Statement

Canadian Pacific Kansas City demonstrates strong profitability with a robust gross profit margin of 41.0% and a solid net profit margin of 26.0% TTM (Trailing-Twelve-Months). Revenue growth is evident, with a 1.9% increase from the previous year, indicating stable operational performance. The EBIT margin stands at 36.3%, and the EBITDA margin is 51.8%, reflecting efficient cost management and operational leverage.

Balance Sheet

The company maintains a healthy balance sheet with a debt-to-equity ratio of 0.47, suggesting a moderate level of leverage. The return on equity (ROE) is 8.0%, which indicates effective utilization of shareholder funds. The equity ratio of 54.8% shows a strong equity position, contributing to financial stability.

Cash Flow

Cash flow performance is solid, with a free cash flow to net income ratio of 0.61, indicating effective conversion of profits into cash. The operating cash flow to net income ratio is 1.40, showing strong cash generation relative to net income. The free cash flow growth rate is -2.1%, reflecting a slight decrease but remains positive overall.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
14.82B	14.55B	12.55B	8.81B	8.00B	7.71B
	Gross Profit
6.08B	5.18B	6.38B	4.59B	4.42B	4.36B
	EBIT
5.38B	5.18B	4.39B	4.80B	3.21B	3.31B
	EBITDA
7.68B	7.48B	-731.00M	4.58B	4.85B	4.44B
	Net Income Common Stockholders
3.85B	3.72B	3.93B	3.52B	2.85B	2.44B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
695.00M	739.00M	464.00M	451.00M	69.00M	147.00M
	Total Assets
88.04B	87.74B	80.39B	73.50B	68.18B	23.64B
	Total Debt
22.65B	22.99B	22.84B	19.65B	20.13B	9.77B
	Net Debt
21.96B	22.25B	22.37B	19.20B	20.06B	9.62B
	Total Liabilities
38.80B	38.85B	37.98B	34.61B	34.35B	16.32B
	Stockholders Equity
48.25B	47.89B	41.49B	38.89B	33.83B	7.32B
Cash Flow		Free Cash Flow
2.35B	2.41B	1.64B	2.58B	2.16B	1.13B
	Operating Cash Flow
5.41B	5.27B	4.14B	4.14B	3.69B	2.80B
	Investing Cash Flow
-2.97B	-2.80B	-2.16B	-1.50B	-13.73B	-2.03B
	Financing Cash Flow
-2.31B	-2.25B	-1.96B	-2.30B	9.94B	-764.00M

Canadian Pacific Kansas City Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 109.98
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• 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 Positive. The current price of 109.98 is above the 20-day moving average (MA) of 105.99, above the 50-day MA of 103.86, and above the 200-day MA of 108.02, indicating a bullish trend. The MACD of 2.73 indicates Negative momentum. The RSI at 58.61 is Neutral, neither overbought nor oversold. The STOCH value of 66.18 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	78 Outperform	$90.49B	20.20	21.81%	2.34%	2.60%	-15.63%
CP	75 Outperform	$102.33B	24.20	7.62%	0.68%	19.28%	8.71%
Sector *	65 Neutral	$4.41B	12.06	5.22%	249.80%	4.09%	-12.16%
TFII	63 Neutral	$9.97B	18.82	14.78%	1.98%	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.

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.

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.

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.