Canadian Pacific Railway (CP) Q4 2019 Earnings Prep

in EARNINGS/INVESTING IDEAS by

Canadian Pacific Railway Limited (NYSE:CP) is scheduled to report Q4 earnings results on January 29, 2020. A conference call to discuss earnings is scheduled for 10 a.m. ET.

The company is expected to report earnings of $3.60/share on revenue of $1.56 billion. The consensus earnings per share (EPS) of $3.60/share is based on a poll of 24 analysts and represents a growth of 8.1% over the same quarter last year when the company reported earnings of $3.33/share.

The revenue forecast of $1.56 billion based on a poll of 19 analysts implies a year-over-year (YoY) growth of 6.1%. Last year the company reported $1.47 billion in revenue for the quarter.

Expected to report EPS growth of $0.27/share for Q4, 2019
Metric Expected Prior Year YoY Change
Revenue $1,559.50 $1,469.62 6.1%
EPS $3.60 $3.33 8.1%

Earnings Call Trends

Historically, management has exceeded analyst expectations 7 out of the last 8 tracked quarters, and missed expectations 1 quarter.

What are your expectations from the Canadian Pacific Railway for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q3, 2019 $3.41 $3.48 2.0% Beat
Q2, 2019 $3.20 $3.28 2.6% Beat
Q1, 2019 $2.22 $2.09 -6.0% Missed
Q4, 2018 $3.10 $3.33 7.4% Beat
Q3, 2018 $3.17 $3.19 0.5% Beat
Q2, 2018 $2.34 $2.40 2.6% Beat
Q1, 2018 $2.09 $2.09 0.2% Beat
Q4, 2017 $2.53 $2.56 1.2% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report.

After the last earnings report for the period ending September 30, 2019, the stock price reacted by increasing by 3.4%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
2019-10-23 $219.73 $227.29 3.4% Increase
2019-07-16 $236.97 $244.50 3.2% Increase
2019-04-23 $218.96 $224.42 2.5% Increase
2019-01-23 $196.11 $202.10 3.1% Increase

Fundamentals And Technical Analysis

Canadian Pacific Railway is currently trading at $259.15/share, down -1.3% for the day. The company is trading at approximately 96.8% of its 52-week high of $267.63/share. The company’s stock price is up 14.0% since the last earnings report and down -1.0% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 70.51 suggests the company is trading in technically overbought territory. The RSI is considered overbought when above 70 and oversold when below 30.

NYSE:CP Stock Price Chart Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 20.3x and a forward P/E multiple of 20.7x. Canadian Pacific Railway’s current share price also implies a price-to-book (P/B) multiple of 6.5x. The following table summarizes some other key fundamental ratios:

Data as of January 21, 2020
Metric Value
Last Fiscal Period FY2019.Q3
Period End Date September 30, 2019
Stock Price (Current) $259.15
P/E Ratio 20.3x
P/E Ratio (Fwd) 20.7x
PEG Ratio 2.2
Total Debt to Capital (%) 16.6%
Levered Free Cash Flow $961.6 million
Enterprise Value / EBITDA 13.5x

Source: Finbox

Company Profile: Canadian Pacific Railway Limited

Canadian Pacific Railway Limited is a large-cap stock with a market capitalization of $35.931 billion and a total enterprise value of $42.978 billion. The company operates in the Industrials sector and the Road & Rail industry.

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. It also transports intermodal traffic comprising retail goods in overseas containers.

The company offers rail and intermodal transportation services through a network of approximately 12,500 miles serving business centers in Quebec and British Columbia, Canada; and the United States Northeast and Midwest regions.

Canadian Pacific Railway Limited was founded in 1881 and is headquartered in Calgary, Canada.

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