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What this page is: Delvantic's full research page for Canadian Pacific Kansas City Limited (CP) — AI-driven forensic equity research: mechanical valuation models (DCF, EPV, anchored-PE, scenario) plus three independent AI lenses (Quality / Value / Sentiment). Everything below is rendered server-side; you are not missing content that requires JavaScript. All scores are predictions and research opinions, not financial advice.
Our current read (analysis of 2026-10-08): Designation Watch · Gem Score -8 (−100…+100 Quality+Value blend) · Quality 62 · Value -55 · Sentiment -16 (timing only, not weighted)
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profile-header/price-overview— company profile, live quote, market capextended-analysis— the core: three AI lens reads with findings, scores, and the analyst memofuture-predictions— our forward price-band predictionsmarket-narrative/ai-findings/gpt-critique— narrative context, cross-model findings, and an adversarial critique of our own analysis (near the end of the document)- Members-only sections (render as login gates for anonymous readers):
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Canadian Pacific Kansas City Limited
CP NYSECanadian Pacific Kansas City Limited is a Class I railroad providing rail freight transportation services across North America. It operates an extensive network of tracks spanning most of Canada, parts of the Midwestern and Northeastern United States, and into Mexico, offering single-line-haul services from Canada and the Upper Midwest through Texas, the Gulf of Mexico, and Mexico. The company also manages cross-border and intra-Mexico freight via operating concessions on more than 3,000 miles of rail in Mexico. Canadian Pacific Kansas City Limited hauls a diverse range of commodities, including grain, intermodal containers, energy products such as crude oil and frac sand, chemicals, plastics, coal, fertilizer and potash, automotive products, and various merchandise. As a key player in the industrials sector, specifically railroads, it facilitates efficient freight movement linking Canada, the United States, and Mexico, supporting trade and logistics throughout the continent. Headquartered in Calgary, Alberta, Canada, the company plays a vital role in North American supply chains.
Price Overview
Price History (1 Year)
Revenue & Net Income Trend
| Period | Revenue | Net Income | Net Margin | YoY/QoQ |
|---|
Key Metrics
EPS (Diluted): 3.24
Total Equity: $33.61B
Shares: 917,100,000
Total Debt: $0.00
Cash: $132.09M
EBITDA: $5.48B
Total Debt: $0.00
Cash: $132.09M
Revenue: $10.82B
Revenue: $10.82B
Revenue: $10.82B
Total Equity: $33.61B
Tax Rate: 24.5%
Equity: $33.61B
Total Debt: $0.00
Cash: $132.09M
Current Liabilities: $4.30B
Long-Term Debt: $0.00
Total Debt: $0.00
Total Equity: $33.61B
Shares: 917,100,000
Shares: 917,100,000
CapEx: -$2.23B
Shares: 917,100,000
Stock Price: $91.82
Net Income: $2.97B
Industry Benchmarks
Income Statement (Annual)
Last updated: Aug 11, 2026 10:50am (57d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $5.7B | $6.3B | $9.0B | $10.4B | $10.8B |
| Cost of Revenue | — | — | — | — | — |
| Gross Profit | — | — | — | — | — |
| Operating Expenses | $3.4B | $3.9B | $5.9B | $6.7B | $6.8B |
| Operating Income | $2.3B | $2.4B | $3.2B | $3.7B | $4.0B |
| Net Income | $2.0B | $2.5B | $2.8B | $2.7B | $3.0B |
| EBITDA | $2.9B | $3.0B | $4.3B | $5.1B | $5.5B |
| EPS | $3.02 | $2.71 | $3.03 | $2.86 | $3.24 |
| EPS (Diluted) | $3.00 | $2.71 | $3.02 | $2.86 | $3.24 |
Balance Sheet (Annual)
Last updated: Aug 11, 2026 10:21am (57d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Cash & Equivalents | $49.5M | $323.8M | $333.1M | $530.5M | $132.1M |
| Total Current Assets | $970.6M | $1.4B | $2.2B | $2.4B | $2.1B |
| Total Assets | $48.9B | $52.8B | $57.4B | $63.0B | $61.7B |
| Current Liabilities | $2.3B | $2.3B | $4.1B | $4.1B | $4.3B |
| Long-Term Debt | — | — | — | — | — |
| Total Liabilities | $24.7B | $24.8B | $26.9B | $27.9B | $28.1B |
| Total Equity | $24.3B | $27.9B | $30.4B | $35.1B | $33.6B |
| Retained Earnings | $7.5B | $9.5B | $11.8B | $13.9B | $14.2B |
Cash Flow (Annual)
Last updated: Aug 11, 2026 10:50am (57d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Operating Cash Flow | $2.6B | $3.0B | $3.0B | $3.8B | $3.8B |
| Capital Expenditure | -$1.1B | -$1.1B | -$1.8B | -$2.0B | -$2.2B |
| Free Cash Flow | $1.5B | $1.9B | $1.2B | $1.8B | $1.6B |
| Acquisitions (net) | $0 | $0 | — | — | — |
| Net Debt Issued / (Repaid) | -$257.7M | -$409.9M | -$1.7B | -$1.7B | -$682.7M |
| Dividends Paid | -$364.0M | -$507.5M | -$507.5M | -$509.0M | -$571.4M |
| Stock Buybacks | $0 | $0 | $0 | $0 | -$2.8B |
| Net Change in Cash | -$46.7M | $264.9M | $9.3M | $197.4M | -$398.4M |
Growth Trends (YoY %)
Last updated: Aug 11, 2026 10:50am (57d ago)| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue Growth | +10.2% | +42.4% | +15.9% | +3.7% |
| Gross Profit Growth | — | — | — | — |
| Operating Income Growth | +3.8% | +31.8% | +18.0% | +8.3% |
| Net Income Growth | +23.3% | +11.7% | -5.3% | +11.4% |
| EBITDA Growth | +4.1% | +41.8% | +19.4% | +7.8% |
Dividend History (Last 20)
Last updated: Aug 11, 2026 10:21am (57d ago)| Date | Dividend | Declaration | Record | Payment |
|---|---|---|---|---|
| 2026-06-26 | $0.19 | — | — | — |
| 2026-03-27 | $0.17 | — | — | — |
| 2025-09-26 | $0.16 | — | — | — |
| 2025-06-27 | $0.17 | — | — | — |
| 2025-03-28 | $0.13 | — | — | — |
| 2024-12-27 | $0.13 | — | — | — |
| 2024-09-27 | $0.14 | — | — | — |
| 2024-06-28 | $0.14 | — | — | — |
| 2024-03-27 | $0.14 | — | — | — |
| 2023-12-28 | $0.14 | — | — | — |
| 2023-09-28 | $0.14 | — | — | — |
| 2023-06-29 | $0.14 | — | — | — |
| 2023-03-30 | $0.14 | — | — | — |
| 2022-12-29 | $0.14 | — | — | — |
| 2022-09-29 | $0.14 | — | — | — |
| 2022-06-23 | $0.15 | — | — | — |
| 2022-03-24 | $0.15 | — | — | — |
| 2021-12-30 | $0.15 | — | — | — |
| 2021-09-23 | $0.15 | — | — | — |
| 2021-06-24 | $0.15 | — | — | — |
Deep Analysis
Risk : Reward — upside vs downside from this company's own quarters
Not computed yetNarrative Economics
market-narrative step).
Claude Reading
The raw numbers tell a less exciting story than the price. Revenue went from $2.59B in Q2'24 to $2.66B in Q1'26 — call it 2.7% over seven quarters, or roughly 1.5% annualized on the most recent trend. The 9.6% revenue CAGR is a merger artifact (KCS closed April 2023 lapped into 2022 comps of $6.33B); the underlying organic growth is GDP-plus at best, and the last four quarters (Q2'25 through Q1'26: $2.66B, $2.63B, $2.82B, $2.66B) show zero sequential progress. Net margins are volatile in a way that suggests earnings quality issues — 33.4% in Q2'25 collapsing to 22.9% in Q1'26 is a 1,000+ bps swing that isn't normal for a rail. That looks like tax/one-timer noise, and the "earnings YoY 11.4%" figure is cherry-picked against a weak Q1'25 comp ($653M vs $607M — actually *down* YoY, so I'd want to verify that momentum number). FCF of $1.58B on $79.6B market cap is a 2.0% FCF yield. That's the anchor.
At 28x earnings, 7.4x sales, and 14.5x EV/EBITDA for a business compounding earnings at 2.7% and posting 8.8% ROE / 9.1% ROIC — below cost of capital in most frameworks — the synthesis verdict is directionally correct. Where I part company is the magnitude: the composite fair value of $39.99 (signal-adjusted $44.77) implies CP should trade at ~12x earnings and 3.2x sales, which is below every Class I peer including CSX (2.8x P/S) and NSC (2.2x P/S). That's punitive. A more defensible fair value takes peer P/S of ~2.5x, applies a 15-20% premium for the unique Mexico corridor (real, if smaller than bulls claim), and lands around 3.0x sales — implying ~$41/share on sales but closer to $60-65/share on a 20-22x P/E of normalized $3.20 EPS. The stock is overvalued, but $45 is a recession-plus-synergy-failure scenario, not a base case.
The models mostly agree on direction but the market-forces "tailwinds" framing sits awkwardly against the thesis eval's -16 score and the synthesis "overvalued 51%" call — that's a real internal contradiction the reader should notice. Market-forces is describing a *setup* (nearshoring is real, moat is real) while thesis-eval is scoring *price* (already reflects it). Both can be true, and I side with thesis-eval: this is a wait-for-inflection story where the operating ratio needs to compress from ~63% toward the promised 57-58%, and until the quarterlies show it, you're paying for hope. The contrarian argument worth taking seriously: CP is the *only* single-line Canada-Mexico rail, capex is largely sunk, and if Mexican manufacturing volumes inflect in 2026-2027 the operating leverage on a fixed-cost network is extraordinary — a 300 bps OR improvement on $11B revenue is ~$330M of incremental EBIT, or ~10% earnings uplift per hundred bps. That's the bull case in one sentence, and it's not crazy.
Data quality flags: the balance sheet shows debt as "—" and debt/equity as 0, which is flatly wrong — CP took on ~$20B in debt for the KCS deal and the current ratio of 0.49 confirms significant near-term obligations. Any valuation model plugging D/E=0 into WACC is materially understating cost of capital and *overstating* fair value. The insider data (last transaction 2017) is useless — either a feed error or genuinely no recent activity, but I wouldn't weight it. The margin volatility quarter-to-quarter deserves a footnote read of the 10-Qs before trusting any DCF. Net: I agree with the synthesis on direction (overvalued) but dissent on magnitude — $45 is too aggressive; $60-65 is a more defensible fair value anchor, implying ~30% downside not 50%. This is a "don't chase, wait for either a $70 handle or an operating ratio print below 60%" story, not a short.
GPT Reading
CPKC looks like a very good railroad and a less attractive stock. The operating business is clearly solid: revenue went from $5.74B in 2021 to $10.82B in 2025, operating income from $2.30B to $4.03B, and net income from $2.05B to $2.97B. Even after the KCS integration, the business is still posting elite margins for an industrial franchise, with a 2025 operating margin of 37.2% and net margin of 27.5%. The quarterly revenue line is also stable rather than promotional: the last seven quarters have sat in a tight $2.55B-$2.82B band, which is what you want from a railroad. But that stability is exactly why the current valuation bothers me. At $79.6B market cap, investors are paying 7.8x sales, 14.5x EV/EBITDA, and 28.4x earnings for a company whose 2025 revenue grew just 3.6% and whose most recent quarter grew only about 3.7% year over year. Those are not bad growth numbers for a rail; they are simply nowhere near premium enough to justify a luxury multiple.
The core contradiction is between quality and acceleration. CPKC’s annual numbers show a step-up from the merger, but the post-merger run-rate now looks mature. 2025 revenue of $10.82B was only $380M above 2024’s $10.44B, while net income rose $300M to $2.97B. That is decent progress, yet not evidence of an earnings machine entering a new phase of compounding. In fact, the quarterly pattern suggests normalization: net margin was 33.4% in 2025-06, then 25.1% in 2025-09, 27.5% in 2025-12, and 22.9% in 2026-03. The latest quarter’s revenue of $2.66B was down from $2.72B a year earlier, while net income slipped from $653.3M to $607.3M. Even if seasonality and operating noise explain part of that, the burden of proof is on the bull case when the stock already discounts a multi-year synergy harvest. Free cash flow of $1.58B on a $79.6B equity value is roughly a 2.0% FCF yield, and that is on a year with nearly $3.0B of net income. For a capital-intensive railroad spending $2.23B in capex, that is too skinny.
What stands out most is that returns are good but not extraordinary relative to valuation. ROE of 8.8%, ROIC of 9.1%, and ROA of 4.8% are respectable for infrastructure, yet they do not scream franchise scarcity worth paying nearly 2.5x book and almost 8x revenue. If this were a software platform with 20% organic growth, maybe. For a railroad, the numbers imply the market is underwriting several years of operating leverage and network synergies before they are visible in the reported economics. The nearshoring and single-line Canada-U.S.-Mexico corridor story may be strategically real, but the financial statements today still read like a mature rail franchise with modest growth, heavy reinvestment needs, and some merger uplift already in the base. I do not think that deserves a valuation premium this large. On today’s fundamentals, I’d frame fair value more around a low-20s earnings multiple on roughly $3.20-$3.40 of sustainable EPS power, which points closer to $70-$78 than $92.
The best argument against this view is that I may be judging too early and too statically. CPKC is not just another GDP-plus railroad if the KCS combination truly creates the only seamless Canada-U.S.-Mexico network. A smart bull would point to the revenue base rising from $9.01B in 2023 to $10.82B in 2025, operating income up from $3.15B to $4.03B, and free cash flow growing at a double-digit clip, while arguing that current margins understate what the network can earn after integration friction fades. They would also note that a 37% operating margin and 27% net margin are already excellent, suggesting that incremental cross-border volume could be highly profitable. If Mexico manufacturing and intermodal flows inflect, a railroad with unique lanes can outrun the industry for longer than skeptics expect. I weigh that less heavily because the stock is not priced for “possible upside”; it is priced for delivery. At 28x earnings and a 2% FCF yield, you need visible evidence that growth is inflecting, not just a credible strategic narrative.
What would change my mind is simple: I need to see the premium translate into numbers. If CPKC can produce two or three consecutive quarters with revenue growth in the high single digits, hold net margin back above the mid-20s, and push annual free cash flow toward $2.2B-$2.5B without a major capex spike, then the current multiple would start to look more earned than aspirational. I would also revisit the thesis if 2026 operating income looks on track for something like $4.4B-$4.6B rather than low-single-digit growth off the 2025 base. Absent that, the current price embeds too much confidence in synergies and nearshoring benefits that are not yet adequately visible in the reported run-rate.
Grok Reading
The numbers describe a high-quality railroad that has already been paid for twice. Revenue stepped from $6.33B in 2022 to $9.01B in 2023 and $10.44B in 2024 on the KCS combination, then only to $10.82B in 2025—roughly 3.6% growth once the deal anniversary rolled off. The last eight quarters sit in a $2.55–2.82B band with no sequential breakout; the most recent print at $2.66B is softer than the prior-year quarter. Net income reached $2.97B in 2025 with a 27.5% net margin and a 37.2% operating margin, which are excellent absolute levels, yet earnings CAGR over the five-year window is only 2.7% because the pre-merger base was already profitable and the post-merger lift has been uneven. Free cash flow of $1.58B after $2.23B of capex produces a ~2.0% FCF yield on the $79.6B equity value. ROIC at 9.1% and ROE at 8.8% are ordinary for heavy industry; a 28.4× P/E, 7.8× sales, and 14.5× EV/EBITDA are not. The market is embedding a multi-year volume and pricing ramp that the trailing data simply do not yet show.
The contradiction with the quantitative fair-value work is instructive rather than dismissible. Composite models land near $40–45, implying the stock is more than 50% rich at $91.82. That gap is almost entirely narrative: the single-line Canada–U.S.–Mexico franchise and the nearshoring thesis. Narrative intensity is strong and the platform-monopoly framing is coherent, but durability is only moderate because railroad synergies have a long history of disappointing and freight volumes remain cyclical. Recent revenue growth of 3.7% y/y and a current ratio of 0.49 with only $132M of cash underscore that this is still a capital-intensive, levered industrial, not a software-like compounder. Paying mid-to-high 20s earnings multiples for GDP-plus volume growth and high-single-digit ROIC is a bet on story realization, not on demonstrated economics.
The strongest opposing case is that CPKC is not a peer-average railroad and should not be valued like one. It is the only carrier with a true contiguous network from the Canadian Prairies through the U.S. heartland into Mexico; if nearshoring of manufacturing into Mexico accelerates, the incremental carloads and pricing power accrue disproportionately here. Operating margins already above 37% and FCF CAGR of 15% show the franchise can convert volume into cash once integration noise fades. Bulls will correctly note that peers trade at far lower multiples precisely because they lack this corridor, so a 40–50% premium can be rational if Mexico volumes compound and the operating ratio grinds toward the high-50s. They will also point out that 2025 net income still grew double-digits even as revenue decelerated, evidence that cost takeout is real. I weigh this less heavily because the premium already assumes those outcomes; at 28× earnings and 7.8× sales the market has prepaid for successful execution rather than leaving room for it. Industry history of failing to sustain 8–10% revenue growth at this scale remains the binding constraint.
What would flip the view is concrete evidence that the story is converting into cash faster than priced: two consecutive quarters of mid-to-high single-digit organic revenue growth driven by Mexico cross-border volumes, operating ratio sustained below 60%, and free-cash-flow run-rate clearly above $2B. A material multiple compression toward 18–20× on rising earnings would also reopen the risk/reward. Absent those, the stock remains a high-quality franchise priced for perfection.
Big-3 Panel — where each AI stands
Advanced Analysis Forensic deep-dive · separate lenses
CP-KCS operates a rare, essentially irreplaceable asset: a Class I railroad network now spanning Canada, the US and Mexico. Revenue nearly doubled from $5.74B (2021) to $10.82B (2025) driven by the KCS combination, with operating margin holding in a strong 35-40% band (37.2% in 2025) and net income reaching $2.97B. Earnings quality looks clean: OCF/NI at 1.24x, accruals -1.1% of assets, and FCF of $1.58B in 2025 comfortably self-funds the business. Altman Z of 2.37 (grey) reflects the debt-heavy capital structure typical of a leveraged rail merger, not operational stress.
Verify before trusting this (5)
- Post-integration KCS synergy realization vs. targets and current operating ratio trajectory
- Debt maturity ladder and net debt/EBITDA vs. investment-grade covenants
- Whether 2025 share count decline reflects an active buyback program or just settlement mechanics
- Customer/commodity concentration (grain, intermodal, energy) and Mexico exposure risk
- Any material contingent liabilities from derailments or regulatory actions
The e2e composite FV of $39.99 (signal-adj $44.77) implies CP should trade near half its current price - that would be a once-in-a-decade dislocation for a Class I rail with a genuine cross-border franchise, which strains credulity. The DCF at $21.72 and EPV floor at $27.25 are almost certainly penalizing the KCS share issuance as chronic dilution and ignoring merger-synergy runway; I discount them heavily. The anchored PE of $89.27 is the most credible input and lands roughly at spot, telling me the market is paying a peer-consistent multiple on current earnings. Adjusting for the strong quality grade (62), clean earnings, and the unique tri-national corridor, deserved value is probably $65-75 - a mid-teens multiple on normalized post-synergy EPS. Against $91.73, that is a 20-30% premium: the price already embeds successful KCS integration, nearshoring tailwinds, and pricing power. Nothing here is a screaming short, but there is no margin of safety and the setup requires the bull narrative to fully deliver. This is a quality business at a full-to-rich price - the classic 'good company, wait for a better entry' situation.
Verify before trusting this (5)
- KCS synergy realization vs the ~$1B run-rate target in latest 10-Q/transcript
- Post-merger normalized share count and whether buybacks have resumed
- Volume trends in cross-border intermodal and Mexico auto/grain lanes
- Operating ratio trajectory - the key lever for whether the PE anchor holds
- Free cash flow conversion net of merger integration capex
The macro tape is modestly risk-on (regime +47, VIX 15.5, S&P near highs), which at a 1.22 beta would normally give CP a real push. But rails are a cyclical industrial, not a beneficiary of animal spirits, and the 10y at 4.65% with an inverted-ish curve presses directly on a debt-heavy post-KCS balance sheet. Net macro read on THIS name: a light crosswind, not a decisive force. The prime input is the narrative. CP still carries the 'only cross-border North American rail corridor / nearshoring platform monopoly' story with strong intensity and medium cult, which is why it trades at a rich multiple. But durability is only moderate, momentum has decelerated (3.7% recent vs 9.6% long-term, -3.8pp over 3y), and that is exactly the tape signature of a synergy story that is aging - not yet broken, but no longer accelerating. Analyst tone on rails has been drifting from euphoric to show-me. The result is a name where the bull narrative and the risk-on tape provide a floor, while narrative fatigue, rate pressure on leverage, and volume-cycle worry provide the offset. Balanced, with the edge toward mild headwind if nearshoring headlines cool.
Verify before trusting this (5)
- Q3/Q4 KCS synergy realization vs guidance - a miss cracks the platform narrative
- Cross-border/Mexico volume trends and any tariff or trade-policy headlines
- Analyst target revisions on rails - watch for a shift from beat-and-raise to in-line
- 10y yield direction; a move back toward 4.2% eases the leverage overhang
- Freight volume data (carloads, intermodal) as a real-time narrative check
This lens hasn't been run for this ticker yet.
Prediction unavailable. valuation-synthesis has no result for CP — the prediction needs its fair-value anchors.