Scotia Capital Upgrades Canadian Pacific Rail Stock on Bullish Sentiment
Analyst Coverage Change
Scotia Capital (RANK#16), a Canadian investment bank, just upgraded its rating on Canadian Pacific Railway from a "Sector Perform" to an "Outperform" rating, citing bullish sentiment towards the company. The analyst also raised the 12-month target forecast to $116 from $110 per share.
This upgrade is significant because it suggests that Scotia Capital analysts believe that Canadian Pacific's stock is poised for growth and may outperform the broader market. The bullish sentiment likely reflects positive developments for Canadian Pacific, such as recent strategic acquisitions and investments in technology and infrastructure, which have positioned the company for growth.
CP Stock Price Forecast & Analysis
Based on the analysis of 17 analysts. According to their predictions, the average target price for CP over the next 12 months is CAD 105.29, which indicates a potential growth of about 5.5% from the current price.
The consensus analyst rating for CP is a "Buy" rating, suggesting that most analysts are optimistic about the company's future performance. Stock Target Advisor's analysis of CP's stock is "Bullish," which means that the platform has identified more positive signals than negative ones.
CP's recent stock performance indicates that the stock price has decreased by 3.80% over the past week and 6.16% over the past month. However, over the last year, the stock price has increased by 1.62%, which suggests that CP has demonstrated some level of stability during this period.
While there may have been some recent fluctuations in the stock price, most analysts are optimistic about CP's future performance and believe that the stock has room for growth.
Fundamental Analysis
Bullish Fundamentals
Superior risk-adjusted returns: The stock has delivered better returns than its sector peers on a risk-adjusted basis for a hold period of at least 12 months and is in the top quartile. This suggests that the stock has been able to generate higher returns while taking on less risk.
High dividend returns: The stock has outperformed its sector peers on average annual dividend returns basis over the past five years, for a hold period of at least 12 months, and is in the top quartile. This is a good indicator for investors seeking high-income yields, especially if the stock is also outperforming on a total return basis.
Low debt: The company is less leveraged than its peers and is among the top quartile, which makes it more flexible. However, investors should check the news and examine the company's sector, as sometimes low debt can be an indicator that the company is not growing and has no growth potential.
Positive cash flow: The company has had positive total cash flow in the most recent four quarters. This indicates that the company is generating more cash than it is spending, which is a good sign for investors.
Positive free cash flow: The company has had positive total free cash flow in the most recent four quarters. This indicates that the company is generating excess cash that can be used for investments or returned to shareholders.
Superior earnings growth: The stock has shown top-quartile earnings growth in the previous five years compared to its sector. This suggests that the company has been able to generate strong earnings growth compared to its peers.
Superior revenue growth: The stock has shown top-quartile revenue growth in the previous five years compared to its sector. This suggests that the company has been able to generate strong revenue growth compared to its peers.
Bearish Fundamentals
Below median total returns: The company has underperformed its peers on annual average total returns in the past 5 years. This suggests that the stock has not generated as much value for investors as its peers in the sector.
Overpriced on cash flow basis: The stock is trading at a higher price compared to its peers on a price to cash flow basis. It is priced above the median for its sector. This means that the company's cash flow does not support its current market valuation, and investors should exercise caution when considering buying the stock.
Overpriced on free cash flow basis: The stock is trading at a higher price compared to its peers on a price to free cash flow basis. It is priced above the median for its sector. This means that the company's free cash flow does not support its current market valuation, and investors should exercise caution when considering buying the stock.
FA Score:
The FA Score (fundamental analysis) of Canadian Pacific Railway is “Bullish” with a score of 7 out of 10, where 10 is very bullish.