Canadian Pacific Railway (NYSE:CP) Cut to Hold at Zacks Investment Research

Canadian Pacific Railway (NYSE:CP) (TSE:CP) was downgraded by Zacks Investment Research from a “buy” rating to a “hold” rating in a note issued to investors on Tuesday, Zacks.com reports. They currently have a $314.00 price objective on the transportation company’s stock. Zacks Investment Research‘s price objective indicates a potential upside of 5.36% from the stock’s previous close.

According to Zacks, “We are impressed by Canadian Pacific's efforts to reward its shareholders.  To this end, the company hiked its dividend payout by 15% to C$0.95 per share (C$3.8 annually) in July, mainly owing to increased efficiencies, courtesy of the precision scheduled railroading model. The company is aiming at an adjusted dividend payout ratio in the 25-30% range in the long term. Moreover, the company decided to restart its share buyback program, which was suspended earlier this year due to coronavirus-triggered uncertainties. The upbeat grain movement is also a positive.  However, decline in overall carloads due to coronavirus-induced disruptions are concerning. Also, high capital expenditures amid adversities may limit bottom-line growth. The company's high debt-to-equity ratio is also concerning.”

CP has been the topic of several other reports. CIBC upped their price objective on shares of Canadian Pacific Railway from $370.00 to $410.00 and gave the stock an “outperform” rating in a report on Thursday, July 23rd. UBS Group upped their price objective on shares of Canadian Pacific Railway from $341.00 to $387.00 and gave the stock a “buy” rating in a report on Friday, June 19th. Raymond James upgraded shares of Canadian Pacific Railway from a “market perform” rating to an “outperform” rating in a report on Tuesday, June 23rd. Barclays upped their price objective on shares of Canadian Pacific Railway from $239.00 to $257.00 and gave the stock an “equal weight” rating in a report on Wednesday, July 15th. They noted that the move was a valuation call. Finally, Wells Fargo & Company increased their target price on shares of Canadian Pacific Railway from $299.00 to $321.00 and gave the stock an “overweight” rating in a report on Thursday, July 23rd. One analyst has rated the stock with a sell rating, seven have given a hold rating and seventeen have assigned a buy rating to the stock. The stock currently has a consensus rating of “Buy” and an average target price of $336.10.

Shares of Canadian Pacific Railway stock traded up $1.24 during mid-day trading on Tuesday, hitting $298.03. The stock had a trading volume of 4,384 shares, compared to its average volume of 461,490. The firm has a 50-day moving average of $293.76 and a two-hundred day moving average of $252.63. Canadian Pacific Railway has a 12-month low of $173.26 and a 12-month high of $312.59. The company has a quick ratio of 0.70, a current ratio of 0.81 and a debt-to-equity ratio of 1.27. The firm has a market cap of $40.23 billion, a P/E ratio of 23.65, a price-to-earnings-growth ratio of 2.71 and a beta of 0.94.

Canadian Pacific Railway (NYSE:CP) (TSE:CP) last issued its quarterly earnings data on Wednesday, July 22nd. The transportation company reported $4.07 EPS for the quarter, topping the consensus estimate of $2.75 by $1.32. Canadian Pacific Railway had a net margin of 29.48% and a return on equity of 34.28%. The firm had revenue of $1.79 billion for the quarter, compared to analyst estimates of $1.78 billion. During the same period in the prior year, the business posted $4.30 EPS. The business’s revenue for the quarter was down 9.5% compared to the same quarter last year. Sell-side analysts expect that Canadian Pacific Railway will post 13.12 earnings per share for the current year.

Several hedge funds and other institutional investors have recently bought and sold shares of the stock. Balentine LLC grew its holdings in shares of Canadian Pacific Railway by 425.0% during the second quarter. Balentine LLC now owns 126 shares of the transportation company’s stock worth $32,000 after buying an additional 102 shares in the last quarter. Rosenberg Matthew Hamilton purchased a new position in Canadian Pacific Railway in the second quarter worth $35,000. Ameritas Investment Company LLC purchased a new position in Canadian Pacific Railway in the first quarter worth $40,000. Pacifica Partners Inc. grew its holdings in Canadian Pacific Railway by 126.7% in the second quarter. Pacifica Partners Inc. now owns 204 shares of the transportation company’s stock worth $51,000 after purchasing an additional 114 shares during the last quarter. Finally, Harbor Investment Advisory LLC purchased a new position in Canadian Pacific Railway in the second quarter worth $62,000. 71.68% of the stock is currently owned by hedge funds and other institutional investors.

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 energy, chemicals and plastics, metals, minerals and consumer, automotive, and forest products.

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