(CP) Canadian Pacific Railway - Ratings and Ratios

Canadian Pacific Kansas City Limited is a transcontinental freight railway operator with a presence in Canada, the United States, and Mexico, transporting a diverse range of commodities, including bulk goods, merchandise freight, and intermodal traffic. The companys extensive network spans approximately 20,000 miles, serving major business centers and facilitating the movement of goods across North America. With a rich history dating back to 1881, the company has evolved to become a critical player in the regional rail transportation industry.

The companys diversified revenue streams are derived from various sources, including grain, coal, potash, fertilizers, and sulphur, as well as forest products, energy, chemicals, and plastics, metals, minerals, consumer products, and automotive. The intermodal traffic segment, comprising retail goods in overseas containers, is also a significant contributor to the companys top-line growth. The recent rebranding from Canadian Pacific Railway Limited to Canadian Pacific Kansas City Limited in April 2023 reflects the companys expanded presence and capabilities.

From a technical analysis perspective, the stock has demonstrated a bullish trend, with the short-term SMA20 (78.61) and long-term SMA200 (77.25) indicators suggesting a positive momentum. The current price (81.65) is near the 52-week high (86.82), indicating a strong upward trajectory. The ATR (1.45) implies a moderate level of volatility, corresponding to a 1.77% daily price movement. Based on these technical indicators, a potential price target could be around 85-88, representing a 4-8% upside from current levels.

Fundamentally, the companys market capitalization stands at approximately $75.5 billion, with a forward P/E ratio of 23.15, indicating a relatively reasonable valuation. The RoE of 8.32% suggests a decent return on equity, although there is room for improvement. Considering the companys historical performance, industry trends, and macroeconomic factors, a forecast for the next 12-18 months could be a revenue growth rate of 5-7%, driven by increased demand for rail transportation services and the companys continued investment in its network and operations. This could potentially translate to an earnings per share (EPS) growth rate of 8-10%, supporting a higher stock price in the range of 90-95.