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Canadian Pacific Kansas City Ltd CP

Morningstar Rating
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Stock XNYS Rating as of
$83.46 −0.72 (0.86%)
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As of Delayed Price Closed

Company Report

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Port Strike a Headache for Shippers but a Potential Tailwind for Certain US Transport Stocks

Matthew Young

As anticipated, the International Longshoremen’s Association has implemented a work stoppage across US East Coast and Gulf Coast ports. As we understand it, the dockworkers union initially wanted a more than 70% increase in wages over a six-year period in order to return to the negotiating table. Before the strike, it sounded to us as if the Biden administration was signaling hesitancy to intervene via the Taft-Hartley Act. Thus, the potential duration of the strike remains uncertain.

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Price vs Fair Value

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CP is trading at a 296% premium.
Price
$83.46
Fair Value
$34.00
Uncertainty
Medium
1-Star Price
$723.56
5-Star Price
$87.40
Economic Moat
Dcvt
Capital Allocation
Jfllplwns

Bulls Say, Bears Say

Bulls

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

Bears

Canadian grain carload-volume growth will likely take a breather in 2024 on a less robust late-2023 harvest and a less favorable export backdrop (to China).

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News

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Trading Information

Previous Close Price
$84.18
Day Range
$83.33–84.70
52-Week Range
$68.92–91.58
Bid/Ask
$79.41 / $88.77
Market Cap
$77.88 Bil
Volume/Avg
1.7 Mil / 1.9 Mil

Key Statistics

Price/Earnings (Normalized)
27.72
Price/Sales
7.42
Dividend Yield (Trailing)
0.67%
Dividend Yield (Forward)
0.67%
Total Yield
0.67%

Company Profile

Canadian Pacific Kansas City is a Class-1 railroad operating on track that spans across most of Canada and into parts of the Midwestern and Northeastern United States. Following the April 2023 Kansas City Southern merger, CP operates new single-line-haul 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 roughly 3,300 miles of rail in Mexico. CP 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 Growth
Total Number of Employees
20,441
Website
https://www.cpr.ca

Competitors

Valuation

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Metric
CP
CSX
CNI
Price/Earnings (Normalized)
 27.7218.8721.61
Price/Book Value
 2.435.255.17
Price/Sales
 7.424.605.95
Price/Cash Flow
 21.5212.8814.62
Price/Earnings
CP
CSX
CNI

Financial Strength

Metric
CP
CSX
CNI
Quick Ratio
 0.390.980.32
Current Ratio
 0.511.160.63
Interest Coverage
 6.576.618.69
Quick Ratio
CP
CSX
CNI

Profitability

Metric
CP
CSX
CNI
Return on Assets (Normalized)
 4.30%8.45%9.80%
Return on Equity (Normalized)
 8.30%28.89%25.86%
Return on Invested Capital (Normalized)
 6.23%13.22%15.02%
Return on Assets
CP
CSX
CNI

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