Canadian Pacific Kansas City Limited (CP)
OvervaluedFundamental
57
Price
$89.51
Market Cap
$76.80B
Part 1 · What the company is worth
Overview
Canadian Pacific Kansas City runs a single freight railway connecting Canada, the United States and Mexico under one network — the only one of its kind since the 2023 merger of Canadian Pacific and Kansas City Southern. It hauls bulk commodities such as grain, coal and potash, merchandise freight like forest products, chemicals, metals and automotive parts, and intermodal containers, moving goods over track it owns rather than shares with competitors.
How it makes money
Revenue comes from freight rates charged per carload or container, which vary by commodity, distance and contract terms; some grain traffic in western Canada is capped by a government-set revenue formula rather than freely negotiated. Because the railway owns its own track, most operating costs are fixed regardless of volume, so profit is highly sensitive to how much freight actually moves over the network rather than to price alone.
Revenue by segment
Forest products, energy, chemicals and plastics, metals, minerals, consumer products and automotive parts — the largest and most varied freight category. Share of freight revenue.
Grain, coal, potash and fertilizers moved in unit trains — commodities produced in large, predictable volumes. Share of freight revenue.
Containers moved between ports, terminals and customers, competing directly with long-haul trucking. Share of freight revenue.
Competitive moat
Cost advantage · WideBuilding a second transcontinental railway alongside an existing one is not economically rational, so CPKC's track competes against trucking more than against another railway on most routes. Owning the only single-line network connecting Canada, the US and Mexico after the Kansas City Southern merger gives it routes competitors cannot simply build to match.
What drives demand
Moderately cyclicalDemand is a mix: grain and potash volumes follow harvests and global agricultural demand more than the economic cycle, while merchandise freight — automotive parts, metals, chemicals — and intermodal containers move with industrial production and consumer spending. That blend cushions the network against a single downturn, but currency swings and fuel prices still move margins on every shipment.
Key risks
- Dependence on key suppliers — The company depends on a limited number of suppliers for core railway equipment and materials, and disruption within the broader supply chain — ports, terminals, other railways — can hurt operating efficiency and raise costs.
- Fuel price volatility — Fuel is a significant share of operating costs. A fuel cost adjustment program mitigates but does not eliminate exposure to sharp price swings from supply shortages or geopolitical disruption.
- Three-currency exposure — Operating across Canada, the US and Mexico exposes results to swings in the Canadian dollar, US dollar and Mexican peso, and debt taken on for the Kansas City Southern acquisition limits financial flexibility.
- Merger integration risk — The company may fail to fully realize the cost savings, growth opportunities and synergies expected from the Kansas City Southern merger, and remains subject to continuing regulatory obligations from that transaction.
Customer concentration
The company states that for both 2025 and 2024 its revenues and operations were not dependent on any major customer — freight volume is spread across many shippers and commodities.
The case for
Buyers argue that being the only railway with a single-line route from Canada through the US to Mexico gives CPKC network advantages competitors cannot replicate, and that a freight mix spread across bulk, merchandise and intermodal, with no dependence on any single customer, makes revenue more resilient than a typical industrial company's.
The case against
Sellers fear that the debt taken on for the Kansas City Southern merger, exposure to three currencies, and dependence on diesel fuel leave margins vulnerable to macro shocks outside the company's control, and that realizing the promised synergies from combining two railways takes longer or costs more than planned.
Written by the editors, published on August 18, 2026
Direct competitors
Who this company fights with for the same customers
Generated with artificial intelligence on September 18, 2026, shared with all users
The largest western US railroad, competing head-on for cross-border Mexican traffic through the Laredo and Eagle Pass gateways and for automotive, grain and intermodal freight in the US Midwest and Gulf.
Eastern US Class I railroad that competes with CPKC for chemicals, automotive and intermodal traffic moving between the Gulf Coast, the Southeast and the Midwest interchange points.
The other eastern US Class I railroad, competing for the same merchandise and intermodal shippers between Chicago, the Gulf and the Atlantic ports that CPKC reaches through its Kansas City Southern network.
The other Canadian transcontinental Class I railroad, competing for the same grain, intermodal, potash and forest-products shippers across the Prairies and for access to the ports of Vancouver and Montreal.
Owned by Berkshire Hathaway, it runs the other big western network and bids for the same Upper Midwest and Pacific Northwest grain, coal, energy and intermodal customers that CPKC serves south of the border.
The main Mexican rail network and the direct rival of CPKC's Mexican lines for domestic freight and for the automotive and intermodal flows moving between central Mexico and the US border.
Balance Sheet & Liquidity
Revenue
$15.45B
Trailing 12 months (through 6/30/2026)
Net Income
$3.87B
Trailing 12 months (through 6/30/2026)
Free Cash Flow
$2.18B
Total Equity
$32.82B
Total Liabilities
$25.15B
Current Ratio
0.59
Interest Coverage
-
Debt/EBITDA
3.05
Earnings Per Share
Revenue & Net Income
Free Cash Flow
Income Breakdown
Historical statement
Margins over time
Debt over time
How heavy the debt is
Growth grid
Growth — Revenue
Fair Value Estimation
Fair Value
$71.57
Current Price
$89.51
Margin of Safety
-25.1%
Fair Value Range
$51.52 - $91.63
Spread across the valuation methods used, not a statistically calibrated confidence interval.
Estimation Methods
Valuation Metrics
P/E Ratio
28.09
ROE
8.2%
P/B Ratio
2.34
P/FCF
35.21
Gross Margin
53.4%
ROIC
8.2%
Profitability Radar
Value Creation (Economic Moat)
ROIC
8.2%
WACC
6.6%
ROIC − WACC
+1.6 pp
ROIC exceeds the cost of capital — the company is creating value for shareholders.
Fundamental Analysis Criteria
Passed (11)
- Price CAGR 11.95%
- ROIC 8.2%
- Gross margin 53.4%
- P/B ratio 2.34
- Debt/equity ratio
- Positive free cash flow
- Debt/EBITDA
- ROE 8.4%
- Revenue growth 5Y 14.4%
- Earnings quality (operating cash flow / net income) 1.33
- Net margin trend 27.5% vs 25.6%
Failed (7)
- P/FCF 35.21
- CapEx intensity
- Current ratio
- DCF valuation (Overvalued)
- Earnings surprise, average -3.7%
- PEG ratio 6.01
- Piotroski F-Score 2/9
Unavailable (8)
- EPS data insufficient
- Dividend payout –
- Operating margin –
- Interest coverage
- Return on tangible assets
- Low reliance on intangibles
- Price below Graham Number
- Share dilution (missing share count)
Piotroski F-Score
Serious financial concerns
Earnings Quality
High quality: earnings backed by cash
Share Dilution
Buying back shares. Shareholder friendly
Institutional Holdings
Governance
Executive Team
| Name | Title | Age |
|---|---|---|
| Mr. Keith E. Creel | CEO, President & Director | 56 |
| Mr. Nadeem S. Velani | Executive VP & CFO | 52 |
| Mr. Mark A. Redd | Executive VP & COO | 54 |
| Mr. John Kenneth Brooks | Executive VP & Chief Marketing Officer | 54 |
| Mr. James Dominic Luther Clements | Executive Vice-President of Strategic Planning & Corporate Services | 55 |
| Ms. Pamela Lynne Arpin | Senior VP & Chief Information Officer | 49 |
| Ms. Cassandra P. Quach | VP, Chief Legal Officer & Corporate Secretary | 51 |
| Ms. Maeghan Albiston | Senior VP & Chief Human Resources Officer | 42 |
| Mr. Laird Joseph Pitz | Senior VP & Chief Risk Officer | 80 |
| Corey Heinz | Managing Director of Asia | - |
Audit Risk
3
Board Risk
4
Compensation Risk
8
Shareholder Rights Risk
3
Documents
- View document
Annual Report (10-K)
A yearly overview of the business, its financial results, and the risks it faces.
Filed on 2026-02-26
- View document
Quarterly Report (10-Q)
A snapshot of financial performance for the most recent three-month period.
Filed on 2026-07-30
- View document
Current Report (8-K)
An announcement of a major event, such as a leadership change or big news.
Filed on 2026-09-29
via SEC EDGAR
Part 2 · The price and its context
This part shows how the price has behaved, not whether the company is worth owning. Inside: technical analysis, potential, historical drawdowns, gamma exposure.
Market Reaction Profile
How much CP moves, measured on its daily prices.
More volatile than 9% of the tracked stocks (90-day volatility).
- Volatility 30d
- 18.1%
- Volatility 90d
- 21.0%
- Beta vs S&P 500 (1y)
- 0.44Correlation 0.25
- Max drawdown (12m)
- -13.5%
- ATR (14d, % of price)
- 1.86%
Earnings reactions
How CP moved around its past quarterly results.
Next earnings release
Oct 28, 2026 · In 4 days · After the close
EPS estimate: 1.31Revenue estimate: $4.2B
What usually happens
- Over the last 12 releases the stock moved a median of 1.7% the next day, up or down.
- Next-day moves: up 7, down 5 (out of 12).
Release history
| Date | When | EPS est. | EPS actual | Surprise | Gap | 1 day | 5 days |
|---|---|---|---|---|---|---|---|
| Jul 29, 2026 | After the close | 1.27 | 1.27 | -0.4% | 0.0% | -3.4% | +0.2% |
| Apr 29, 2026 | After the close | 1.10 | 1.04 | -5.8% | +1.8% | +3.2% | +2.0% |
| Jan 28, 2026 | After the close | 1.40 | 1.33 | -4.7% | +2.0% | +5.7% | +10.8% |
| Oct 29, 2025 | After the close | 1.15 | 1.10 | -4.0% | 0.0% | -0.8% | -3.9% |
| Jul 30, 2025 | After the close | n/a | n/a | n/a | -1.4% | -2.9% | +1.0% |
| Apr 30, 2025 | After the close | n/a | n/a | n/a | +1.4% | +0.4% | +1.9% |
| Jan 29, 2025 | After the close | n/a | n/a | n/a | +2.9% | +1.2% | -1.0% |
| Oct 23, 2024 | After the close | n/a | n/a | n/a | -1.1% | -0.4% | -0.8% |
| Jul 30, 2024 | After the close | n/a | n/a | n/a | +3.0% | +2.1% | -5.5% |
| Apr 24, 2024 | Before the open | n/a | n/a | n/a | -0.8% | -6.6% | -10.6% |
| Jan 30, 2024 | After the close | n/a | n/a | n/a | +0.9% | +1.3% | +6.1% |
| Oct 25, 2023 | After the close | n/a | n/a | n/a | +1.1% | +0.1% | +2.8% |
Release dates from SEC 8-K filings.
Updated 10/24/2026
Historical statistics for educational purposes only. They are not forecasts and not investment advice.
Price reaction to the news
Latest news on CP and what the price did next.
- 6/15/2026Positive$1000 Invested In Canadian Pacific Kansas 15 Years Ago Would Be Worth This Much Today
- +1 day
- +0.5%
- +3 days
- -2.6%
- 6/11/2026PositiveIf You Invested $1000 In Canadian Pacific Kansas Stock 20 Years Ago, You Would Have This Much Today
- +1 day
- +0.3%
- +3 days
- -1.9%
Return of the stock minus return of SPY over the same days. A news item close to a price move did not necessarily cause it. Historical data for educational purposes only, not investment advice.
Latest News
Recent headlines for CP.
- 6/15/2026POSITIVE$1000 Invested In Canadian Pacific Kansas 15 Years Ago Would Be Worth This Much Today
An investment of $1000 in Canadian Pacific Kansas City Limited (CP) made 15 years ago would have grown substantially, highlighting the company's strong long-term performance. While specific figures are not provided in the title, such a scenario typically implies significant capital appreciation and potentially dividend reinvestment over the period. This underscores CP's historical ability to generate value for shareholders, driven by factors such as operational efficiency, strategic acquisitions (like the Kansas City Southern merger), and its critical role in North American supply chains. Investors considering long-term holdings may find this historical performance indicative of future potential.
- 6/11/2026POSITIVEIf You Invested $1000 In Canadian Pacific Kansas Stock 20 Years Ago, You Would Have This Much Today
An investment of $1000 in Canadian Pacific Kansas City Limited (CP) stock twenty years ago would have yielded a substantial return, illustrating the long-term growth potential of the railway operator. While specific figures are not provided in this summary, the article implies significant capital appreciation and potential dividend reinvestment over two decades. This historical performance underscores CP's resilience and ability to generate value for shareholders through operational efficiency and strategic acquisitions, making it a noteworthy consideration for long-term portfolio strategies.