Canadian Pacific Kansas City Valuation

Q: What is the Fair Price of CP when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

CP (CA$102.88) is trading below our estimate of [[fair value]] (CA$132.93)

Is CP undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

Below Fair Value
Significantly Below Fair Value
Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of CP when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: CP (CA$102.88) is trading below our estimate of fair value (CA$132.93)

Significantly Below Fair Value: CP is trading below fair value by more than 20%.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for CP?

Key metric: As CP is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for CP. This is calculated by dividing CP's market cap by their current earnings.
What is CP's PE Ratio?
PE Ratio	27.1x
Earnings	CA$3.54b
Market Cap	CA$96.20b

CP key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	8.2x
Enterprise Value/EBITDA	15.6x
PEG Ratio	1.9x

Price to Earnings Ratio vs Peers

How does CP's PE Ratio compare to its peers?

The above table shows the PE ratio for CP vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	Forward PE	Estimated Growth	Market Cap
Peer Average	21.4x
CNR Canadian National Railway	17.3x	3.9%	CA$93.7b
TFII TFI International	26x	23.2%	CA$16.9b
CSX CSX	18.2x	5.7%	US$66.7b
NSC Norfolk Southern	24.3x	12.9%	US$58.8b
CP Canadian Pacific Kansas City	27.1x	14.1%	CA$96.2b

Price-To-Earnings vs Peers: CP is expensive based on its Price-To-Earnings Ratio (27.1x) compared to the peer average (21.4x).

Price to Earnings Ratio vs Industry

How does CP's PE Ratio compare vs other companies in the North American Transportation Industry?

0 Companies	Price / Earnings	Estimated Growth	Market Cap

0 Companies		Estimated Growth	Market Cap

No more companies

Price-To-Earnings vs Industry: CP is good value based on its Price-To-Earnings Ratio (27.1x) compared to the North American Transportation industry average (28.1x).

Price to Earnings Ratio vs Fair Ratio

What is CP's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

CP PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	27.1x
Fair PE Ratio	23.3x

Price-To-Earnings vs Fair Ratio: CP is expensive based on its Price-To-Earnings Ratio (27.1x) compared to the estimated Fair Price-To-Earnings Ratio (23.3x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst CP forecast and predictions for the stock price in 12 month’s time.
Date	Share Price	Average 1Y Price Target	Dispersion	High	Low	1Y Actual price	Analysts
Current	CA$102.88	CA$127.35 +23.8%	6.1%	CA$139.00	CA$100.00	n/a	20
Nov ’25	CA$107.56	CA$127.30 +18.4%	6.1%	CA$139.00	CA$100.00	n/a	20
Oct ’25	CA$113.57	CA$126.75 +11.6%	6.3%	CA$137.00	CA$100.00	n/a	20
Sep ’25	CA$111.87	CA$126.65 +13.2%	6.1%	CA$136.00	CA$100.00	n/a	20
Aug ’25	CA$111.51	CA$125.38 +12.4%	7.5%	CA$136.00	CA$100.00	n/a	21
Jul ’25	CA$107.74	CA$123.23 +14.4%	7.4%	CA$133.00	CA$100.00	n/a	22
Jun ’25	CA$108.49	CA$123.23 +13.6%	7.4%	CA$133.00	CA$100.00	n/a	22
May ’25	CA$106.76	CA$123.36 +15.6%	7.5%	CA$133.00	CA$100.00	n/a	22
Apr ’25	CA$119.30	CA$119.57 +0.2%	7.6%	CA$136.00	CA$100.00	n/a	21
Mar ’25	CA$116.98	CA$117.46 +0.4%	6.2%	CA$131.00	CA$100.00	n/a	22
Feb ’25	CA$111.37	CA$116.09 +4.2%	6.4%	CA$127.00	CA$95.00	n/a	22
Jan ’25	CA$104.84	CA$113.76 +8.5%	7.2%	CA$128.00	CA$95.00	n/a	21
Dec ’24	CA$100.99	CA$113.38 +12.3%	7.1%	CA$128.00	CA$95.00	n/a	21
Nov ’24	CA$99.32	CA$113.71 +14.5%	6.9%	CA$128.00	CA$95.00	CA$107.56	21
Oct ’24	CA$100.96	CA$118.19 +17.1%	7.2%	CA$133.00	CA$95.00	CA$113.57	21
Sep ’24	CA$109.32	CA$119.10 +8.9%	6.4%	CA$133.00	CA$95.00	CA$111.87	20
Aug ’24	CA$107.97	CA$119.05 +10.3%	6.5%	CA$133.00	CA$94.00	CA$111.51	20
Jul ’24	CA$107.00	CA$117.25 +9.6%	6.6%	CA$128.00	CA$94.00	CA$107.74	20
Jun ’24	CA$102.63	CA$117.53 +14.5%	7.1%	CA$130.00	CA$93.00	CA$108.49	19
May ’24	CA$107.40	CA$117.29 +9.2%	7.6%	CA$130.00	CA$93.00	CA$106.76	17
Apr ’24	CA$104.07	CA$116.06 +11.5%	7.1%	CA$126.00	CA$93.00	CA$119.30	17
Mar ’24	CA$104.68	CA$115.24 +10.1%	7.4%	CA$126.00	CA$91.00	CA$116.98	17
Feb ’24	CA$103.62	CA$114.82 +10.8%	7.6%	CA$126.00	CA$89.00	CA$111.37	17
Jan ’24	CA$100.95	CA$111.88 +10.8%	9.7%	CA$130.00	CA$89.00	CA$104.84	17
Dec ’23	CA$110.83	CA$109.44 -1.3%	8.6%	CA$126.00	CA$89.00	CA$100.99	16
Nov ’23	CA$101.33	CA$108.81 +7.4%	8.3%	CA$126.00	CA$89.00	CA$99.32	16

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.