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How Analysts View Canadian Pacific ahead of Its Q1 Results

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Apr. 16 2019, Published 8:14 a.m. ET

Analysts’ recommendations

Canadian Pacific Railway (CP) has a consensus rating of ~1.87 and a consensus “buy” recommendation from analysts polled by Reuters. Approximately 83% of the 23 analysts covering the stock have given it bullish recommendations, while the remaining 17% have given it “holds.”

Wall Street analysts expect a double-digit surge in Canadian Pacific’s stock price. Its target price of $296.88 suggests a potential upside of 12.7% over the next year.

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Nonetheless, analysts have a different view on the majority of Canadian Pacific’s Class I railroad company peers. They have provided “buy” recommendations on most railroad companies (IYT) but don’t see much upside potential in these companies’ stock prices over the next year.

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Approximately 61% out of 28 analysts have provided “strong buy” or “buy” recommendations on Union Pacific (UNP) stock. About 36% have given it “hold” recommendations, while the remaining 3% have given it “sell” recommendations. Their target price of $178.25 depicts a potential upside of 6.3% over the next year.

For Norfolk Southern (NSC), ~54% out of 26 analysts have provided “strong buy” or “buy” recommendations. Approximately 38% of analysts have said to “hold” the stock, while the remaining 8% have given it “sell” recommendations. Their target price of $198.33 implies a potential upside of 2.4% over the next year.

Nearly 46% of the 26 analysts tracking CSX Corporation (CSX) have given the stock “strong buy” or “buy” recommendations. Approximately 50% of them have given it “hold” recommendations, while the remaining 4% have given it “sells.” Their consensus target price of $78.38 suggests a potential upside of 3.3% over the next year.

Stock price performance

Canadian Pacific Railway stock has outperformed the returns of major US indexes. The stock has returned 19.7% YTD (year-to-date), while the Dow Jones and the S&P 500 have risen 13.1% and 15.9%, respectively, YTD.

Canadian Pacific’s YTD returns marginally lag the gains in the NASDAQ, which is up 20.2%. The company’s top competitors Norfolk Southern, CSX, and Union Pacific have registered YTD gains of 29.5%, 22.1%, and 21.3%, respectively.

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