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what it is
CPKC moves freight by rail across Canada, the U.S., and Mexico through one connected network.
how it gets paid
Last year Can. Pac. Ks made $11.0B in revenue. other freight was the main engine at $5.74B, or 41% of sales.
what just happened
Latest quarter EPS came in at $0.76 versus a $1.10 estimate, a 30.91% miss.
At a glance
A balance sheet — strong enough to weather a downturn
75/100 earnings predictability — reasonably predictable
24.7x trailing p/e — priced about right
0.9% dividend yield — cash in your pocket every quarter
8.0% return on capital — nothing to write home about
xvary composite: 65/100 — average
What they do
CPKC moves freight by rail across Canada, the U.S., and Mexico through one connected network.
CPKC owns about 20,300 miles of track across the U.S., Canada, and Mexico. It is the only transnational rail network in North America. If your grain or containers need all three countries, switching railroads is not a click. It is a logistics headache with steel attached.
How they make money
$11.0B
annual revenue
grain
$3.08B
intermodal
$2.52B
metals and minerals
$1.68B
coal
$0.98B
other freight
$5.74B
The products that matter
hauls grain, coal, potash
Bulk Freight
$6.1B · 55% of revenue
it's the biggest segment at $6.1B. grain alone is 21% of freight volume, which is why crop quality still reaches into your earnings even when the rest of the railroad is running fine.
largest segment
moves shipping containers
Intermodal
$3.0B · +8% growth
this $3.0B segment is 27% of revenue and grew faster than the rest of the business. if merger density is going to show up in the income statement, you should expect to see it here first.
faster growth
mixed freight categories
Other Freight
$1.9B · 18% of revenue
it's the smallest bucket at $1.9B, but 18% of revenue is still material. +2% growth says this segment is supporting the base, not driving the rerating story.
supporting segment
Key numbers
58.5%
operating margin
Operating margin → profit after running the railroad → so what: this business keeps about $0.59 from each revenue dollar before interest and taxes.
24.7x
trailing p/e
P/E → stock price versus last year's profit → so what: you are paying a premium multiple for a railroad with only 2% published 18-month upside.
$14.6B
long-term debt
Long-term debt → money owed over many years → so what: higher interest expense already hurt the latest quarter, so debt is not just background noise.
0.9%
dividend yield
Dividend yield → cash you get paid to wait → so what: CP is not paying you much while you wait for the merger math to show up.
Financial health
A
strength
- balance sheet grade A — very strong financial position
- risk rank 2 — safer than 80% of stocks
- price stability 90 / 100
- long-term debt $14.6B (18% of capital)
- net profit margin 32.0% — keeps 32 cents of every dollar in revenue
- return on equity 10% — $0.10 profit for every $1 investors have put in
A with balance sheet grade and risk rank standing out. your money faces less risk here than at most public companies.
Total return vs. market
You invested $10,000 in CP 3 years ago → it's now worth $9,680.
The index would have given you $13,880.
source: institutional data · total return
What just happened
missed estimates
Latest quarter EPS came in at $0.76 versus a $1.10 estimate, a 30.91% miss.
Revenue in the December period rose nearly 8%, helped by record harvests in grain and currency effects. Then higher interest and tax expense showed up, and EPS fell 18%.
$0.76
eps
$1.10
est. eps
30.91%
surprise
the number that mattered
The miss was 30.91%. For a stock with a 24.7x trailing P/E, that is the kind of gap that resets expectations fast.
-
fourth-quarter earnings at canadian pacific fell short of expectations.
-
revenues in the december period rose nearly 8%, as record harvests led to good growth in grain shipments, the company's largest category.
-
currency effects also boosted reported sales.
-
however, higher interest and tax expense put a damper on margins, and earnings per share fell 18% as a result.
-
the company is making good progress on efficiency measures, though, with average train speed accelerating by 4% and average train weight rising by 3%. we expect solid bottom-line improvement this year.grain harvests are expected to be strong again in 2026, with both canada and the u.s. feeding the strong appetite in the export market. the intermodal business is also expected to remain strong as new alliances are leading to higher volume. moreover, from the merger two years ago should accelerate now that the integration process has largely been completed. (we note that beginning this year, we are using adjusted earnings rather than gaap earnings.) our estimate is for earnings per share to reach $3.90 a share in 2026 and $4.40 a share in 2027, up from $3.37 in 2025. Management has stepped up its repurchase activity. the company had been restricted for a time from buying back its own stock due to the merger in 2023.
source: wall street consensus and quarterly EPS data, 2026
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What could go wrong
Your biggest risk is the $1B merger-savings timeline slipping. At 24.7x earnings, this stock is priced like the integration work arrives on time and reaches shareholders cleanly.
med
merger savings miss
The stock is leaning on $1B of merger savings by 2026. If integration progress stalls, you are left with a premium multiple and no fresh reason to pay it.
valuation risk rises fast if the 2026 savings clock slips
med
grain harvest volatility
Grain is 21% of freight volume. A weak harvest means fewer carloads, softer network use, and less help from one of CP's most important traffic streams.
a bad crop year reaches 21% of volume before management can offset it
med
below-the-line expense drag
Revenue rose nearly 8% in the latest quarter, but EPS still fell 18% because higher interest and tax expense got there first. That is a reminder that better rail operations do not always reach shareholders cleanly.
earnings can lag revenue even when freight trends look healthy
low
intermodal cooling off
Intermodal is 27% of revenue and grew 8%, faster than the rest of the business. If alliance-driven volume slows, one of the cleaner growth pieces loses momentum.
would weaken the best current growth segment
A miss on the $1B merger-savings target by 2026 would leave a 24.7x railroad multiple looking expensive, and a bad crop year reaches 21% of freight volume.
source: institutional data · regulatory filings · risk analysis
Pay attention to
earnings path
$3.90 adjusted EPS in 2026
Management and the street are looking for $3.90 in 2026 versus $3.37 in 2025. If that climb stalls, the premium-multiple argument gets thinner fast.
integration clock
$1B merger savings by 2026
That is the target the whole story keeps circling. You do not need management adjectives here. You need the timeline to stay intact.
operating proof
train speed +4%, train weight +3%
Those are small numbers with big meaning. Faster, heavier trains are the operating proof that a merged railroad is starting to behave like one network.
capital return
44.9M-share buyback authorization
The NCIB was renewed in January 2026 after a post-merger restriction. Buybacks help per-share results, but they should be a supplement to execution, not the story itself.
Analyst rankings
earnings predictability
75 / 100
CP usually gives you a readable earnings path. in human-speak, analysts think this railroad is easier to model than most industrials.
risk rank
2
This sits in the safer bucket of the market. Low bankruptcy risk is not the problem here. Paying a full price is.
price stability
90 / 100
The stock has been steadier than most. That makes it easier to hold through noise, but steady is not the same as cheap.
source: institutional data
Institutional activity
institutions have been net selling for 2 consecutive quarters — 355 buyers vs. 462 sellers in 3q2025. total institutional holdings: 0.6B shares. net selling for 2 quarters.
source: institutional data
Price targets
3-5 year target range
$63
$102
$81
current price
$83
target midpoint · +2% from current · 3-5yr high: $115 (+55% · 12% ann'l return)
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