Morningstar

Canadian Pacific Kansas City Ltd CP

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Stock XNYS Rating as of
$90.08 +0.77 (0.86%)
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As of Delayed Price Closed

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Canadian Pacific's First-Half Volumes Muted, but We Expect Growth To Return

Matthew Young

Following the appointment of railroading legend Hunter Harrison as CEO in 2012, Canadian Pacific embarked on a successful profitability turnaround. Harrison and his successor—operations expert Keith Creel, who worked alongside Harrison for decades—took the rail from ranking as one of the worst Class I margin performers to among the best. We like that Creel has infused the firm's culture with precision-scheduled railroading principles, which stand behind much of the rail's progress. Profitability caught up with PSR pioneer and historical margin leader Canadian National in 2018 and surpassed it in 2019 with a 60% operating ratio.

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Price vs Fair Value

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CP is trading at a 293% premium.
Price
$90.08
Fair Value
$55.00
Uncertainty
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1-Star Price
$42.40
5-Star Price
$88.60
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

The Kansas City Southern merger, which creates new, seamless intermodal lanes, is yielding meaningful opportunities for incremental volume growth.

Bears

US tariffs will temper carload demand for several commodity shipments like steel and lumber this year.

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Trading Information

Previous Close Price
$89.31
Day Range
$88.45–90.50
52-Week Range
$68.42–91.50
Bid/Ask
$89.85 / $90.66
Shares Outstanding
887.74M
Market Cap
$79.97B
Volume/Avg
2M / 3M

Key Statistics

Price/Earnings (Normalized)
27.13
Price/Sales
7.54
Dividend Yield (Trailing)
0.74%
Dividend Yield (Forward)
0.74%
Total Yield
4.52%

Company Profile

Canadian Pacific Kansas City is a Class I railroad operating on tracks that span most of Canada and into parts of the Midwestern and Northeastern United States. Following the April 2023 Kansas City Southern merger, CPKC operates new single-linehaul services from Canada and the Upper Midwest down through Texas, the Gulf of Mexico, and into Mexico. It also hauls cross-border and intra-Mexico freight via operating concessions on more than 3,000 miles of rail in Mexico. CPKC hauls shipments of grain, intermodal containers, energy products (like crude and frac sand), chemicals, plastics, coal, fertilizer and potash, automotive products, and a diverse mix of other merchandise.
Sector
Industrials
Industry
Railroads
Stock Style Box
Large Core
Total Number of Employees
19,479
Website
https://www.cpkcr.com

Competitors

Valuation

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Metric
CP
CSX
UNP
Price/Earnings (Normalized)
 27.1327.2122.22
Price/Book Value
 2.416.478.16
Price/Sales
 7.546.236.42
Price/Cash Flow
 20.7617.6316.17
Price/Earnings
CP
CSX
UNP

Financial Strength

Metric
CP
CSX
UNP
Quick Ratio
 0.510.770.66
Current Ratio
 0.670.970.92
Interest Coverage
 7.085.638.05
Quick Ratio
CP
CSX
UNP

Profitability

Metric
CP
CSX
UNP
Return on Assets (Normalized)
 4.80%7.39%10.24%
Return on Equity (Normalized)
 8.95%25.10%40.40%
Return on Invested Capital (Normalized)
 6.83%11.85%15.92%
Return on Assets
CP
CSX
UNP

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