Upside case
Bull case
$224+160.5%
CP would need investors to value it at roughly 59x earnings — about 37x more generous than today's 23x forward P/E. That requires meaningful multiple expansion on top of continued earnings growth.
Analysis OverviewBuyUpdated May 1, 2026
Canadian Pacific Kansas City Ltd. (CP) Stock Analysis
Wall Street verdict, consensus price target, and analyst rating breakdown — everything needed to frame the risk/reward at today's price.
Analyst consensus
Buy
Covering
43
analysts
26 bullish · 2 bearish · 43 covering CP
Strong Buy
0
Buy
26
Hold
15
Sell
2
Strong Sell
0
Consensus Target
$92
+7.0% vs today
Scenario Range
$124 – $224
Model bear to bull value window
Coverage
43
Published analyst ratings
Valuation Context
22.8x
Forward P/E · Market cap $77.2B
CP price targets
Three scenarios for where CP stock could go
Current
~$86
Confidence
53 / 100
Updated
May 1, 2026
Where we are now
Current · $86
Bear
$124
Base
$139
Bull
$224
Market caseClosest to today
Base case
$139+61.8%
At 37x on FY1 earnings, the base case reflects a reasonable but not stretched valuation. It prices in continued growth without assuming an exceptional setup.
Stress case
Bear case
$124+44.2%
The bear case assumes sentiment or fundamentals disappoint enough to push CP down roughly 44% from the current price.
Not financial advice. Model confidence reflects internal scenario assumptions, not a guarantee of returns. Past performance does not predict future results.
Canadian Pacific Kansas City Ltd.
CP · NYSEIndustrialsRailroadsDecember year-end
Canadian Pacific Kansas City is a North American freight railroad that operates a transcontinental network connecting Canada, the United States, and Mexico. It generates revenue primarily from hauling bulk commodities like grain, potash, and coal (roughly 60% of revenue) and merchandise freight including automotive, industrial, and consumer products (roughly 40%). The company's key advantage is its unique single-line service across all three North American countries—a network moat created by its 2023 merger that competitors cannot easily replicate.
Market Cap
$77.2B
Revenue TTM
$15.0B
Net Income TTM
$4.1B
Net Margin
27.2%
CP Revenue and Earnings Performance
Quarterly beat-or-miss track record against analyst estimates, plus forward revenue and EPS outlook for the next two fiscal years.
EPS Beat Rate
33%Exceptional
12 quarters tracked
Revenue Beat Rate
42%Exceptional
vs consensus estimates
Avg EPS Surprise
-0.5%
above Street consensus
Beat / Miss Record
BeatMissLeft = EPS · Right = Revenue
Q3 2025
Q4 2025
Q1 2026
Q2 2026
Last 4 Quarters
EPS beats: 0 of 4Q3 2025
EPS
$0.81/$0.82
Revenue
$2.7B/$2.8B
Q4 2025
EPS
$0.80/$0.81
Revenue
$3.7B/$2.6B
Q1 2026
EPS
$0.95/$0.99
Revenue
$2.9B/$2.9B
Q2 2026
EPS
$0.76/$0.78
Revenue
$2.7B/$2.7B
| Quarter | EPS (Actual / Est) | EPS Surprise | Revenue (Actual / Est) | Rev Surprise |
|---|---|---|---|---|
| Q3 2025 | $0.81/$0.82 | -1.2% | $2.7B/$2.8B | -3.1% |
| Q4 2025 | $0.80/$0.81 | -1.2% | $3.7B/$2.6B | +38.8% |
| Q1 2026 | $0.95/$0.99 | -4.0% | $2.9B/$2.9B | -0.3% |
| Q2 2026 | $0.76/$0.78 | -2.6% | $2.7B/$2.7B | -1.4% |
FY1–FY2 Estimates
Revenue Outlook
FY1
$14.7B
-2.2% YoY
FY2
$16.4B
+12.2% YoY
EPS Outlook
FY1
$4.61
+1.4% YoY
FY2
$5.37
+16.6% YoY
Trailing FCF (TTM)$2.7B
FCF Margin: 18.1%
Next Earnings
—
Expected EPS
—
Expected Revenue
—
CP beat EPS estimates in 0 of 4 tracked quarters. Mixed delivery makes the upcoming report a key data point for re-rating.
CP Revenue Breakdown by Segment
Product and geographic revenue mix from the latest annual disclosure, with year-over-year growth by segment.
Latest disclosure
FY 2025
Total disclosed revenue $29.7B
Product Mix
Latest annual revenue by segment or product family
Cargo and Freight
49.7%
+3.9% YoY
Tap, hover, or focus a slice to inspect segment detail.
Geographic Mix
Latest annual revenue by reported region
CANADA
48.0%
+4.4% YoY
Tap, hover, or focus a slice to inspect segment detail.
Cargo and Freight is the largest disclosed segment at 49.7% of FY 2025 revenue, up 3.9% YoY.
CANADA is the largest reported region at 48.0%, up 4.4% YoY.
CP Valuation Snapshot
Current multiples compared to the S&P 500, the company's sector, and its own five-year average.
Relative Value Signal
Slightly Undervalued
Fair value est. $93 — implies +7.5% from today's price.
Upside to Fair Value
7.5%
potential upside
Deep DiscountFair ValueVery Expensive
vs S&P 500 Trailing P/E
CP
25.9x
vs
S&P 500
25.2x
In line with benchmark
vs Industrials Trailing P/E
CP
25.9x
vs
Industrials
25.9x
In line with benchmark
vs CP 5Y Avg P/E
Today
25.9x
vs
5Y Average
18.1x
+43% premium
Forward PE
22.8x
S&P 500
19.1x
+20%
Industrials
20.8x
+10%
5Y Avg
—
—
Trailing PE
25.9x
S&P 500
25.2x
+3%
Industrials
25.9x
+0%
5Y Avg
18.1x
+43%
PEG Ratio
5.55x
S&P 500
1.75x
+218%
Industrials
1.59x
+249%
5Y Avg
—
—
EV/EBITDA
16.8x
S&P 500
15.3x
+10%
Industrials
13.9x
+21%
5Y Avg
15.9x
+6%
Price/FCF
48.4x
S&P 500
21.3x
+127%
Industrials
20.6x
+134%
5Y Avg
30.8x
+57%
Price/Sales
7.0x
S&P 500
3.1x
+122%
Industrials
1.6x
+338%
5Y Avg
5.8x
+20%
Dividend Yield
0.74%
S&P 500
1.88%
-60%
Industrials
1.24%
-40%
5Y Avg
1.05%
-29%
| Metric | CP | S&P 500 | Industrials | 5Y Avg CP |
|---|---|---|---|---|
| Forward PE | 22.8x | 19.1x+20% | 20.8x | — |
| Trailing PE | 25.9x | 25.2x | 25.9x | 18.1x+43% |
| PEG Ratio | 5.55x | 1.75x+218% | 1.59x+249% | — |
| EV/EBITDA | 16.8x | 15.3x | 13.9x+21% | 15.9x |
| Price/FCF | 48.4x | 21.3x+127% | 20.6x+134% | 30.8x+57% |
| Price/Sales | 7.0x | 3.1x+122% | 1.6x+338% | 5.8x+20% |
| Dividend Yield | 0.74% | 1.88% | 1.24% | 1.05% |
CP trades above S&P 500 benchmarks on 4 of 6 measured multiples — is elevated on some multiples, but competitive on others — a mixed valuation picture.
Forward P/E and PEG reflect analyst consensus estimates. Historical averages use trailing ratios where forward data is unavailable.S&P 500 and sector benchmarks both use trailing median P/E — similar readings indicate the broader index and sector are priced alike.
Open valuation toolCP Financial Health
Verdict
Strong
CP generates $2.7B in free cash flow at a 18.1% margin — returns 4.5% of market cap to shareholders annually.
Cash Engine
Revenue, margins, and cash generation
Revenue (TTM)
Trailing-twelve-month sales base
$15.0B
Revenue Growth
TTM vs prior year
+1.1%
Gross Margin
Gross profit as a share of revenue
47.9%
Operating Margin
Operating income divided by revenue
37.0%
Net Margin
Net income divided by revenue
27.2%
EPS (TTM)
Diluted earnings per share, trailing twelve months
$4.54
Free Cash Flow (TTM)
Cash generation after capex
$2.7B
FCF Margin
FCF as share of revenue — the primary cash quality signal
18.1%
Capital Quality
ROIC, leverage, and debt serviceability
ROIC
Return on invested capital — primary competitive quality signal
6.0%
ROA
Return on assets, trailing twelve months
5.5%
Cash & Equivalents
Liquid assets on the balance sheet
$184M
Net Debt
Total debt minus cash
$23.0B
Debt Serviceability
Net debt as a multiple of annual free cash flow
8.5× FCF
~8.5 years to full repayment at current FCF run-rate
ROE
Return on equity, trailing twelve months
10.1%
Shareholder Returns
How capital is returned to owners
Total shareholder yield
4.5%
Dividend
0.7%
Buyback
3.8%
Share Repurchases
Trailing buyback outflow — dollar magnitude of capital returned
$3.9B
Dividend / Share
Annualized trailing dividend per share
$0.87
Payout Ratio
Share of earnings distributed as dividends
19.2%
Shares Outstanding
Declining as buybacks retire shares
898M
All figures from the trailing twelve months. ROIC uses invested capital (equity + net debt).
Open full ratios pageCP Stock Risk Factors
Key factors that could pressure the stock price, compress the multiple, or weigh on future results.
AI analysis · updated April 11, 2026
High Risk
Acquisition Debt
Significant debt from the Kansas City Southern acquisition has paused buybacks and dividend growth, limiting financial flexibility and potentially impacting future earnings.
High Risk
Trade Uncertainty & Tariffs
Fluctuations in U.S. trade policy and potential tariffs on Canadian and Mexican goods have already forced CPKC to moderate its financial outlook, reducing revenue growth projections.
High Risk
Fuel Price Volatility
Volatile fuel prices represent a large portion of operating costs; sudden spikes can erode profitability and squeeze margins.
Medium
Economic Downturns
A decline in domestic or global economic conditions, including interest rate changes and trade policy shifts, can reduce freight volumes and strain debt servicing capacity.
Medium
Regulatory Environment
The Surface Transportation Board’s scrutiny and potential service disruptions pose a risk that contracts and traffic could be diverted to competitors if operations are not managed effectively.
Lower
Extreme Weather Conditions
Extreme cold can degrade air brake systems, increasing derailment risk, while wildfires during hot, dry periods threaten rail infrastructure.
These are risk mechanisms, not predictions. The key question is which would force a cut to earnings estimates or a lower multiple than the market currently prices in.
Why CP Stock Could Outperform
Structural drivers behind the upside case and why the stock could outperform over the next 12 months.
AI analysis · updated April 11, 2026
Tri‑National Network Advantage
CP’s rail network spans Canada, the United States, and Mexico, giving it unmatched cross‑border reach. This tri‑national footprint positions the company to capture trade flows that move between the three largest economies in North America.
Kansas City Southern Integration Synergies
The merger with Kansas City Southern is expected to deliver cost savings and revenue synergies as the two systems integrate. CP will benefit from expanded route options and streamlined operations across the combined network.
Essential Commodity Transport Resilience
CP transports large volumes of essential goods such as coal, grain, and automotive parts, which remain in demand regardless of economic cycles. Strong agricultural demand, especially for grain and potash, is projected to offset weaker shipments in other sectors.
Operational Efficiency & Record Margins
CP has shown improving operating ratios and record margins, driven by its Precision Scheduled Railroading model. The model has enabled cost control and operational excellence, leading to industry‑leading safety metrics.
Projected EPS Growth in 2026
The company is forecasted to achieve low double‑digit core adjusted diluted EPS growth in 2026, reflecting the combined impact of network expansion, operational efficiencies, and commodity demand.
A real bull case compounds — each driver matters most when it strengthens margins, supports capital returns, and keeps the company above the market's minimum growth bar simultaneously.
CP Stock Price Performance
52-week range context and price returns across multiple time horizons. Dividend contribution is shown separately in the Capital Return section.
Current Price
$85.98
52W Range Position
84%
52-Week Range
Current price plotted between the 52-week low and high.
52-Week Low
$68.42
+25.7% from the low
52-Week High
$89.42
-3.8% from the high
1 Month
+8.15%
3 Month
+6.95%
YTD
+15.5%
1 Year
+17.1%
3Y CAGR
+2.0%
5Y CAGR
+2.1%
10Y CAGR
+12.0%
Range context matters because valuation compression and earnings misses rarely hit from the same starting point. A stock already far below its high can still fall, but it is no longer carrying the same embedded optimism as one pressing a fresh peak.
CP vs Peers
Valuation, growth, and margin comparison against the closest publicly traded peers for this company.
Peer Set
Accurate peer set
Forward PE
22.8x
vs 24.0x median
-5% below peer median
Revenue Growth
-2.2%
vs +3.9% median
-157% below peer median
Net Margin
27.2%
vs 21.9% median
+24% above peer median
| Company | Mkt Cap | Fwd PE | Rev Grw | Margin | Rating | Upside |
|---|---|---|---|---|---|---|
CP CP Canadian Pacific Kansas City Ltd. | $77.2B | 22.8x | -2.2% | 27.2% | Buy | +7.0% |
CNI CNI Canadian National Railway Company | $68.6B | 14.0x | +3.9% | 27.2% | Hold | -10.3% |
UNP UNP Union Pacific Corporation | $159.2B | 21.3x | +20.9% | 29.8% | Buy | +7.1% |
CSX CSX CSX Corporation | $84.7B | 24.0x | +1.7% | 21.6% | Buy | -5.5% |
NSC NSC Norfolk Southern Corporation | $71.2B | 26.2x | +2.0% | 21.9% | Hold | +4.6% |
WAB WAB Westinghouse Air Brake Technologies Corporation | $45.9B | 25.5x | +8.3% | 10.5% | Buy | +7.6% |
This peer comparison reflects companies with similar business models, product lines, or market positioning, supplemented by industry grouping when direct matches are limited.
CP Dividend and Capital Return
CP returns capital mainly through $3.9B/year in buybacks (3.8% buyback yield), with a modest 0.74% dividend — combining for 4.5% total shareholder yield.
Dividend SustainableFCF Well Covered
Total Shareholder Yield
4.5%
Dividend + buyback return per year
Buyback Yield
3.8%
Dividend Yield
0.74%
Payout Ratio
19.2%
How CP Splits Its Return
Div 0.74%
Buyback 3.8%
Dividend 0.74%Buybacks 3.8%
Dividend Profile
Yield, cadence, and growth quality
Dividend / Share
Trailing annualized cash dividend
$0.87
Growth Streak
Consecutive years of dividend increases
2Y
3Y Div CAGR
3.0%
5Y Div CAGR
3.6%
Ex-Dividend Date
—
Payment Cadence
Semi-Annual
5 payments over the last 12 months
Buyback Engine
How much per-share support comes from repurchases
Repurchases (TTM)
Cash used for buybacks in the latest trailing period
$3.9B
Estimated Shares Retired
46M
Approx. Share Reduction
5.1%
Shares Outstanding
Current diluted share count from the screening snapshot
898M
At 5.1%/year, buybacks mechanically lift EPS even with flat earnings — each remaining share represents a slightly larger piece of the company.
| Year | Div / Share | YoY Grw | BB Yield | Total Yield |
|---|---|---|---|---|
| 2026 | $0.36 | — | — | — |
| 2025 | $0.63 | +14.2% | 5.8% | 7.0% |
| 2024 | $0.55 | -2.9% | 0.0% | 1.0% |
| 2023 | $0.57 | -1.4% | 0.0% | 1.0% |
| 2022 | $0.58 | -4.4% | 0.0% | 1.0% |
FAQ
7 questionsCP Investor Questions
Common questions answered from live analyst data and company financials.
01Is Canadian Pacific Kansas City Ltd. (CP) stock a buy or sell in 2026?
Canadian Pacific Kansas City Ltd. (CP) is rated Buy by Wall Street analysts as of 2026. Of 43 analysts covering the stock, 26 rate it Buy or Strong Buy, 15 rate it Hold, and 2 rate it Sell or Strong Sell. The consensus 12-month price target is $92, implying +7.0% from the current price of $86. The bear case scenario is $124 and the bull case is $224.
02What is the CP stock price target for 2026?
The Wall Street consensus price target for CP is $92 based on 43 analyst estimates. The high-end target is $99 (+15.1% from today), and the low-end target is $85 (-1.1%). The base case model target is $139.
03Is Canadian Pacific Kansas City Ltd. (CP) stock overvalued in 2026?
CP trades at 22.8x times forward earnings. The stock's valuation is broadly in line with the broader market. Based on current multiples versus the peer group, the relative model signals slightly undervalued. Whether the stock is over or undervalued ultimately depends on whether consensus earnings estimates are achievable.
04What are the main risks for Canadian Pacific Kansas City Ltd. (CP) stock in 2026?
The primary risks for CP in 2026 are: (1) Acquisition Debt — Significant debt from the Kansas City Southern acquisition has paused buybacks and dividend growth, limiting financial flexibility and potentially impacting future earnings. (2) Trade Uncertainty & Tariffs — Fluctuations in U. (3) Fuel Price Volatility — Volatile fuel prices represent a large portion of operating costs; sudden spikes can erode profitability and squeeze margins. Each factor has the potential to pressure earnings or compress the stock's valuation multiple.
05What is Canadian Pacific Kansas City Ltd.'s revenue and earnings forecast?
Analyst consensus estimates CP will report consensus revenue of $14.7B (-2.2% year-over-year) and EPS of $4.61 (+1.4% year-over-year) for the upcoming fiscal year. The following year, analysts project $16.4B in revenue.
06When does Canadian Pacific Kansas City Ltd. (CP) report its next earnings?
A confirmed upcoming earnings date for CP is not yet available. Check the Earnings section above for the most recent quarterly report dates and forward estimates.
07How much free cash flow does Canadian Pacific Kansas City Ltd. generate?
Canadian Pacific Kansas City Ltd. (CP) generated $2.7B in free cash flow over the trailing twelve months — a free cash flow margin of 18.1%. CP returns capital to shareholders through dividends (0.7% yield) and share repurchases ($3.9B TTM).