After market close today, Canadian Pacific Railway (TSE:CP) (NYSE:CP) reported its Q4-2022 financial results, which beat both revenue and earnings-per-share (EPS) expectations.
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CP’s revenue reached C$2.46 billion compared to the consensus estimate of about C$2.45 billion, representing a 21% growth rate. Interestingly, Canadian National Railway (TSE:CNR) (NYSE:CNI), CP’s competitor, also reported revenue growth of 21% last week.
Next, CP’s core adjusted diluted earnings per share were C$1.14, up 18.75% year-over-year, compared to expectations of $1.08.
Additionally, CP’s cash from operations reached C$1.72 billion for the quarter, growing by almost 185%. However, CP’s adjusted operating ratio worsened, as it rose to 59.1% from 57.5% last year (the lower, the better).
On a full-year basis, revenues grew by 10%, and diluted EPS remained unchanged. Notably, free cash flow grew by 52% to C$2.7 billion. Lastly, the company’s FRA-reportable train accident frequency fell by 15%, hitting 0.93 compared to 1.10 last year. This marks “the lowest FRA-reportable train accident frequency among Class 1 railroads for the 17th consecutive year.”
Canadian Pacific also mentioned that it’s awaiting a decision from the U.S. Surface Transportation Board regarding its merger with Kansas City Southern. CP expects the decision to be made this quarter.
Is CP Stock a Buy, According to Analysts?
Turning to Wall Street, Canadian Pacific Rail stock comes in as a Moderate Buy based on six Buys and five Holds assigned in the past three months. The average CP stock price target of C$115.92 implies 10.4% upside potential.
