Canadian Pacific Railway (CP) Downgraded by Zacks Investment Research

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Zacks Investment Research downgraded shares of Canadian Pacific Railway (NYSE:CP) (TSE:CP) from a buy rating to a hold rating in a research report report published on Friday.

According to Zacks, “Shares of Canadian Pacific have gained 17.2% in a year's time driven by the upbeat freight scenario. As in the previous quarters, freight revenues, which account for bulk of the company's top line, increased in the fourth quarter of 2018. Improvement in operating ratio is also a positive. In 2018, this key metric improved 30 basis points to 61.3%. Additionally, the company's efforts to reward shareholders thorugh dividends and share buybacks are impressive. On the flip side, high operating expenses are concerning. Operating expenses increased 11% in 2018. The recent labor deals have also pushed up labor costs. Weakness pertaining to the company's US grain portfolio is concerning. The dismal performance was due to reduced shipments to the US P&W. We are also concerned about the company's high debt levels.”

Several other equities analysts have also commented on CP. Seaport Global Securities restated a buy rating on shares of Canadian Pacific Railway in a research report on Thursday, January 24th. ValuEngine lowered shares of Canadian Pacific Railway from a buy rating to a hold rating in a research report on Thursday, October 11th. Cowen reiterated a buy rating and issued a $236.00 target price on shares of Canadian Pacific Railway in a research report on Friday, October 19th. Stephens reiterated a hold rating and issued a $206.00 target price on shares of Canadian Pacific Railway in a research report on Sunday, January 6th. Finally, BMO Capital Markets reiterated a buy rating on shares of Canadian Pacific Railway in a research report on Sunday, December 16th. Three research analysts have rated the stock with a hold rating and eighteen have issued a buy rating to the company’s stock. The company presently has an average rating of Buy and a consensus price target of $232.14.

Shares of NYSE:CP opened at $200.35 on Friday. The firm has a market cap of $28.17 billion, a price-to-earnings ratio of 17.92, a price-to-earnings-growth ratio of 1.42 and a beta of 1.15. Canadian Pacific Railway has a 1-year low of $167.48 and a 1-year high of $224.19. The company has a debt-to-equity ratio of 1.10, a quick ratio of 0.58 and a current ratio of 0.68.

Canadian Pacific Railway (NYSE:CP) (TSE:CP) last released its quarterly earnings results on Wednesday, January 23rd. The transportation company reported $4.55 EPS for the quarter, topping the consensus estimate of $3.18 by $1.37. The business had revenue of $2.01 billion during the quarter, compared to analyst estimates of $1.93 billion. Canadian Pacific Railway had a net margin of 26.62% and a return on equity of 30.69%. The company’s quarterly revenue was up 17.1% on a year-over-year basis. During the same quarter in the prior year, the firm earned $3.22 earnings per share. As a group, equities research analysts anticipate that Canadian Pacific Railway will post 12.65 EPS for the current year.

The firm also recently disclosed a quarterly dividend, which was paid on Monday, January 28th. Stockholders of record on Friday, December 28th were given a dividend of $0.489 per share. This is a positive change from Canadian Pacific Railway’s previous quarterly dividend of $0.33. The ex-dividend date of this dividend was Thursday, December 27th. This represents a $1.96 annualized dividend and a dividend yield of 0.98%. Canadian Pacific Railway’s dividend payout ratio (DPR) is 17.05%.

Large investors have recently bought and sold shares of the company. Strs Ohio purchased a new stake in Canadian Pacific Railway during the third quarter valued at about $3,170,000. Dimensional Fund Advisors LP lifted its stake in Canadian Pacific Railway by 2.1% during the third quarter. Dimensional Fund Advisors LP now owns 43,314 shares of the transportation company’s stock valued at $9,180,000 after buying an additional 886 shares in the last quarter. Gateway Investment Advisers LLC lifted its stake in Canadian Pacific Railway by 0.5% during the third quarter. Gateway Investment Advisers LLC now owns 75,264 shares of the transportation company’s stock valued at $15,951,000 after buying an additional 342 shares in the last quarter. FMR LLC lifted its stake in Canadian Pacific Railway by 1.5% during the third quarter. FMR LLC now owns 1,245,056 shares of the transportation company’s stock valued at $263,373,000 after buying an additional 18,445 shares in the last quarter. Finally, Cerebellum GP LLC lifted its stake in Canadian Pacific Railway by 61.9% during the fourth quarter. Cerebellum GP LLC now owns 1,468 shares of the transportation company’s stock valued at $261,000 after buying an additional 561 shares in the last quarter. Institutional investors own 68.34% of the company’s stock.

About Canadian Pacific Railway

Canadian Pacific Railway Limited, together with its subsidiaries, owns and operates a transcontinental freight railway in Canada and the United States. The company transports bulk commodities, including grain, coal, potash, fertilizers, and sulphur; and merchandise freight, such as finished vehicles and machineries, automotive parts, chemicals and plastics, petroleum and crude products, and metals and minerals, as well as forest, industrial, and consumer products.

See Also: Fundamental Analysis

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