(CP) Canadian Pacific Railway - Ratings and Ratios

Canadian Pacific Kansas City Limited (CP) operates a transcontinental freight railway network spanning over 20,000 miles across Canada, the United States, and Mexico. Established in 1881 and headquartered in Calgary, Canada, CP transports a diverse range of commodities. These include bulk goods such as grain, coal, potash, fertilizers, and sulphur, as well as merchandise freight like forest products, energy, chemicals, plastics, metals, minerals, consumer products, and automotive parts. Additionally, CP handles intermodal traffic, which involves shipping retail goods in overseas containers. The companys extensive network connects key business centers, facilitating efficient transportation services. CPs merger with Kansas City Southern (KCS) in 2023 expanded its reach, making it the first single-line railway linking Canada, the U.S., and Mexico.

CPs operational efficiency is supported by a strategic network that enhances supply chain performance. The companys commitment to precision scheduled railroading ensures reliable service, optimizing asset utilization and reducing transit times. This approach has contributed to CPs reputation as a leader in the rail transportation sector, focusing on safety and customer satisfaction. The integration with KCS has further strengthened CPs position, offering a seamless transportation solution across North America.

Looking ahead, CPs stock is expected to experience volatility in the next three months, influenced by its position relative to key moving averages. Currently trading at 103.16, it is above the 20-day SMA (101.57) but below the 50-day (106.27) and 200-day (108.91) SMAs, suggesting potential bearish pressure. The average true range (ATR) of 3.29 indicates manageable volatility. Support levels may be tested, particularly around the 101.57 mark, with resistance near 106.27. A breakout above the 50-day SMA could signal a bullish reversal, while a breach below support might deepen the correction. Volume will be crucial in confirming any trend reversal. On the fundamental side, CPs forward P/E of 20.33 suggests potential undervaluation, supported by a P/B ratio of 1.95, which is near industry averages. However, the P/S ratio of 6.41 and RoE of 7.76 indicate moderate valuations and profitability. Overall, CPs stock is likely to remain range-bound, with upside limited by current moving average resistance and downside supported by its trailing valuations.