Canadian Pacific Rail (CP.TO) Buy, Sell or Hold

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Canadian Pacific Rail (CP.TO)

127.62

-0.39 (0.30%)

as of Jul 10, 2026, 8:00:00 pm Market Open.

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Investor Insights

Jul 10, 2026, 12:00 am

This summary was created by AI, based on 25 opinions in the last 12 months.

Experts have mixed views on Canadian Pacific Rail (CP), emphasizing its potential amidst a challenging economic landscape. While some analysts highlight strong growth prospects, particularly driven by the recent KSU acquisition and a favorable North American footprint, others express caution due to ongoing economic headwinds and the cyclical nature of the railroad industry. Many see CP as a resilient player that could benefit from efficiency gains linked to AI and an eventual recovery in manufacturing. Tariff concerns and uncertainty surrounding trade agreements remain pressing issues, but several analysts believe that CP's strengths, including its network's integration across Canada, the US, and Mexico, position it favorably for the long term. Overall, despite concerns regarding current economic conditions, there appears to be optimism about CP’s future performance and its ability to recover once trade issues stabilize.

Consensus

Hold

Valuation

Fair Value

Similar

CNR

DON'T BUY

CP vs. CN They're in the process of buying KSU, beating out CN last month. CN is the better rail with better assets than CP. Facing an activist shareholder, CN just announced $700 million in cost savings to return to their industry-leading operating ratio. CP's issue is that it has a weaker network, but will be boosted if they absorb KSU. He's not sure it's a slam dunk that CP will win KSU, because the US federal commission may balk. If it does happen, CP will take on a lot of leverage and integration risk that will distract them in their core business that cold let CN take away some of that market share.

HOLD

CP vs. CNR Rail industry is a great area to be in. Limited competition, strong barriers to entry, environmentally friendly, pricing power, got rid of non-core assets. Continue to own them, even on the dips. As the economy gets better, they'll do well. The KSU deal will make CP more competitive with CNR. Two of the best companies in the sector in NA. Own one or both.

PAST TOP PICK

(A Top Pick Jul 27/20, Up 13%) Keep an eye on to buy again in the future. Fires have held up shipping. Numbers likely to come down. Relative price performance has been weak. Cyclicals need to be traded, not held forever. He's waiting for the next quarter, and more water under the bridge for the KSU deal. Great operator. Cautious short-term.

BUY

CP vs. CNR The takeover was a real love triangle. He's confident they'll get approval. You want to buy them into this weakness. 9% growth rate, 17.5x 2023 earnings. Will be a better entity going forward. CNR looks very good with their new strategy to better their OR over time. Both are to be owned at this point.

BUY ON WEAKNESS

He is looking at it, but he owns CNR-T right now. It is under a bit of pressure because of the acquisition. He is looking at buying it on weakness. CP-T will come out of this as a much stronger company.

BUY

With a longer timeline, you'll do well with this. It looks like they'll get away with the KSU merger to create a giant. Multiples are reasonable. The rails reflect the wider economy in coming years, and he expects both to do well. He expects earnings to grow to $5 within 2-3 years. Inevitably, some divestment but also synergy will happen in the merger to come. There may be some headaches in the first few years, but this deal will pay off.

BUY

KSU today announced it will accept CP's bid over CN. The rollercoaster ride at KSU continues. CP has pulled back in valuation. He likes CP. It's a good opportunity to pick up CP now as he expects integration with KSU. It now trades at a discount.

BUY

CN and CP Don't chase CN now. There's a bidding war by CN and CP for KSU. KS is talking to CP and he expects CP to win the war. He prefers CP. He's short CP, because he's long KSU. CP looks good in terms of earnings.

PAST TOP PICK

(A Top Pick May 14/20, Up 46%) Likes rails in general. Transports are an interesting place. For new money, he prefers logistics companies right now. Long-term, rails will continue to be attractive.

BUY ON WEAKNESS

If CP buys KSU or not CP and CN are wonderful businesses, near monopolies. His hunch is regulators won't allow either CN or CP to buy KSU, though the rails are certain. A 50/50 chance the deal will happen. If so, either CP or CN will do well with KSU, making the deal accretive. He doesn't see much risk in the deal. They've done a great job fixing their cost structure, but both rails trade at a rich more-than-20x forward PE.

COMMENT

CP today increased their offer to buy Kansas City Southern He owns none of the rails here, but owns FedEx and has long liked it and its management. This battle will go on for a while. Even if CP wins, it'll likely be a year before the deal closes, and CP will be worth $90 billion, on par with rival bidder CN. CN will still have bigger revenues than CP, while CP will carry more debt if CP wins the battle. So, CP would win the battle, but lose the war. It'll be interesting to see how much synergy CP can generate if CP wins. The short-term winner will be KCS shareholders.

COMMENT

CN vs. CP Easy. Go with CN. Latest news is a letter saying that the merger with KSU is not in the public interest. If the merger happens, it will be accretive long-term. If not, CN remains attractive, trading at 18x 2023 earnings while growing at 11%. At times, he's a CP guy, but here he'd pick CNR. [Note: some audio problems]

HOLD

CP vs. CNR Owns CNR. Numbers positive over the last little while, but the KSU acquisition may hamper them going into next year, with the stock moving sideways. Rail industry as a whole is great: limited competition, hard to duplicate, good pricing power, sweet spot of transportation. KSU acquisition will enhance CNR's business. Forest fires are affecting the backlog, but this is short term.

BUY

Allan Tong’s Discover Picks CP boasts steady revenues and a slightly lower PE than CN at 24.34x vs. 26.47x. Also, CP's stock has risen while CN's has slid since KSU signalled it's preference for CN bid. In fact, CP has leapt 52% since my original call (excluding the current 0.8% dividend). Year to date, CP has climbed over 9% while CP has underperformed at -7.4%. CN has won the war long-term, but CP has claimed the short-term victory. Read Looking back after 100 weeks of Hot TSX Stocks: BAM, Rails, Garbage for our full analysis.

BUY ON WEAKNESS

East-west rail lines. Their recent acquisition failure means they don't have access to Mexico. About 27 times earnings. It is probably a little rich. Monitor it and if it takes a nose dive then it is a time to step in.

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Canadian Pacific Rail (CP.TO)