Reassessing The Changing Outlook For Canadian Pacific Railway Limited (CP)

Capital Research & Management Co recently announced the acquisition of new stake in Canadian Pacific Railway Limited (NYSE:CP). The institutional investor has increased its shareholding in the Industrials company by 5.09% to 24.57 million shares with purchase of 1.19 million shares. This fresh investment now brings its stake to 2.64% valued currently at $1.87 billion. In addition, 1832 Asset Management LP raised its holdings by 0.17 million to 23.29 million shares. And The Vanguard Group, Inc. has lifted its position by 0.90% or 0.2 million shares – to 21.94 million shares.

With over 2.07 million Canadian Pacific Railway Limited (CP) shares trading Monday and a closing price of $73.36 on the day, the dollar volume was approximately $151.69 million. The shares have shown a negative half year performance of -6.30% and its price on 03/13/23 gained nearly 0.31%. Currently, there are 930.30M common shares owned by the public and among those 929.94M shares have been available to trade.

An analysis of what Wall Street brokers have to say about the expected price targets for this stock gives us this picture: 30 analysts who have offered their price forecasts for CP have a consensus price objective of $121.46. The analysts have set the share’s price value over the next 12 months at a high of $166.10 and a low of $103.92. The average price target is 16.91% above its recent price level and an upside to the estimated low will see the stock gain 29.41% over that period. But an upside of 55.83% will see the stock hit the forecast high price target while median target price for the stock is $118.00.

Insiders at the company have transacted a total of 78 times over the past 12 months, according to data filed with the U.S. Securities and Exchange Commission (SEC). 40 of these insider trades were purchases, accounting for 424,679 shares. Insider sales of the common stock occurred on 38 occasions, with total insider shares sold totaling 560,858 shares.

The top 3 mutual fund holders in Canadian Pacific Railway Limited are Government Pension Fund – Global, Vanguard Total International Stoc, and WCM Focused International Growth. Government Pension Fund – Global owns 15.01 million shares of the company’s stock, all valued at over $1.14 billion. The company bought an additional 5.88 million shares recently to bring their total holdings to about 1.61% of the shares outstanding. Vanguard Total International Stoc sold 78583.0 shares to see its total holdings shrink to 12.26 million shares valued at over $930.71 million and representing 1.32% of the shares outstanding. WCM Focused International Growth sold -0.56 million shares to bring its total holdings to over 10.48 million shares at a value of $795.87 million. WCM Focused International Growth now owns shares totaling to 1.13% of the shares outstanding.

Shares of Canadian Pacific Railway Limited (NYSE: CP) opened at $72.09, down -$1.04 from a prior closing price of $73.13. However, the script later moved the day high at 74.26, up 0.31%. The company’s stock has a 5-day price change of -5.50% and -8.56% over the past three months. CP shares are trading -1.65% year to date (YTD), with the 12-month market performance down to -5.69% lower. It has a 12-month low price of $65.17 and touched a high of $84.22 over the same period. CP has an average intraday trading volume of 1.81 million shares. The stock is trading above its simple moving averages at the SMA20, SMA50, and SMA200, as the current price level is off by -4.93%, -5.21%, and -2.59% respectively.

Institutional ownership of Canadian Pacific Railway Limited (NYSE: CP) shares accounts for 69.50% of the company’s 930.30M shares outstanding. Mutual fund holders own 36.45%, while other institutional holders and individual stakeholders account for 41.68% and 1.52% respectively.

It has a market capitalization of $95.54B and a beta (3y monthly) value of 0.83. The stock’s trailing 12-month PE ratio is 19.46, while the earnings-per-share (ttm) stands at $3.77. The company has a PEG of 1.76 and a Quick Ratio of 0.50 with the debt-to-equity ratio at 0.51. Price movements for the stock have been influenced by the stock’s volatility, which stands at 2.80% over the week and 2.14% over the month.

Analysts forecast that Canadian Pacific Railway Limited (CP) will achieve an EPS of $0.73 for the current quarter, $0.87 for the next quarter and $3.86 for 2024. The lowest estimate earnings-per-share for the quarter is $0.62 while analysts give the company a high EPS estimate of $0.89. Comparatively, EPS for the current quarter was $0.5 a year ago. Earnings per share for the fiscal year are expected to decrease by -9.70%, and 15.97% over the next financial year. EPS should grow at an annualized rate of 11.06% over the next five years, compared to 8.10% over the past 5-year period.

If you are looking to buy this stock, then you may note that the average analyst recommendation by 30 brokerage firm advisors rate Canadian Pacific Railway Limited (CP) as a “Moderate Buy” at a consensus score of 2.40. Specifically, 16 Wall Street analysts polled rate the stock as a buy, while 10 of the 30 advise that investors “hold,” and 0 rated it as a “Sell.”

Looking at the support for the CP, a number of firms have released research notes about the stock. Deutsche Bank stated their Buy rating for the stock in a research note on November 29, 2022, with the firm’s price target at $80-$98. BofA Securities coverage for the Canadian Pacific Railway Limited (CP) stock in a research note released on September 12, 2022 offered a Buy rating with a price target of $87. Scotiabank was of a view on July 07, 2022 that the stock is Sector Perform, while Credit Suisse gave the stock Neutral rating on June 28, 2022, issuing a price target of $74. BofA Securities on their part issued Neutral rating on April 08, 2022.