Canadian Pacific Kansas City (TSE:CP) (NYSE:CP), also known as CPKC following CP’s US$31 billion Kansas City Southern acquisition, recently reported its Q1-2023 earnings results, revealing strong growth in both revenues and earnings per share (EPS), although both figures came in slightly below expectations.
For the quarter, the company posted revenues of C$2.27 billion (versus analysts’ expectations of C$2.28 billion), a 23% increase from last year’s C$1.84 billion.
Meanwhile, CPKC’s core adjusted diluted EPS, which excludes significant items and accounting related to the acquisition, rose to C$0.90, up from C$0.67 in the prior year. Additionally, volumes increased by 11% year-over-year. Further, the company’s adjusted operating ratio (operating expenses divided by revenues — the lower, the better) improved by 690 basis points, hitting 62.9% compared to 69.8% in Q1-2022.
Keith Creel, CPKC President and CEO, noted, “Our strong bulk franchise, fueled by a robust Canadian grain harvest, plus competitive service offerings in intermodal helped produce these results providing momentum as we begin our journey as CPKC.”
Is CP Stock a Buy, According to Analysts?
Turning to Wall Street, Canadian Pacific Rail stock comes in as a Strong Buy based on 12 Buys and four Holds assigned in the past three months. The average CP stock price target of C$118.60 implies 12.2% upside potential.