Intrinsic value of Canadian Pacific Railway - CP

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$157.29

  Intrinsic Value

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  Rating & Target

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  Value-price divergence*

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Previous close

$157.29

 
Intrinsic value

$55.74

 
Up/down potential

-65%

 
Rating

str. sell

 
Value-price divergence* premium content

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*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of CP stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 22.9

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -7.15
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  4,613
  4,705
  4,813
  4,937
  5,076
  5,230
  5,399
  5,583
  5,782
  5,996
  6,226
  6,472
  6,735
  7,015
  7,312
  7,627
  7,962
  8,316
  8,690
  9,085
  9,503
  9,943
  10,408
  10,897
  11,413
  11,956
  12,528
  13,131
  13,764
  14,431
  15,132
Variable operating expenses, $m
 
  2,818
  2,883
  2,956
  3,039
  3,131
  3,231
  3,341
  3,460
  3,587
  3,725
  3,857
  4,014
  4,180
  4,358
  4,546
  4,745
  4,956
  5,179
  5,414
  5,663
  5,925
  6,202
  6,494
  6,802
  7,125
  7,466
  7,825
  8,203
  8,600
  9,018
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  2,723
  2,818
  2,883
  2,956
  3,039
  3,131
  3,231
  3,341
  3,460
  3,587
  3,725
  3,857
  4,014
  4,180
  4,358
  4,546
  4,745
  4,956
  5,179
  5,414
  5,663
  5,925
  6,202
  6,494
  6,802
  7,125
  7,466
  7,825
  8,203
  8,600
  9,018
Operating income, $m
  1,890
  1,887
  1,931
  1,981
  2,037
  2,099
  2,167
  2,242
  2,322
  2,409
  2,502
  2,615
  2,721
  2,834
  2,954
  3,082
  3,217
  3,360
  3,511
  3,671
  3,840
  4,018
  4,205
  4,403
  4,612
  4,831
  5,062
  5,305
  5,562
  5,831
  6,114
EBITDA, $m
  2,364
  2,378
  2,433
  2,495
  2,566
  2,643
  2,729
  2,822
  2,922
  3,031
  3,147
  3,271
  3,404
  3,546
  3,696
  3,855
  4,024
  4,203
  4,392
  4,592
  4,803
  5,026
  5,260
  5,508
  5,769
  6,043
  6,332
  6,637
  6,957
  7,294
  7,648
Interest expense (income), $m
  361
  352
  364
  378
  394
  412
  431
  453
  477
  502
  530
  559
  591
  625
  661
  699
  740
  782
  828
  876
  927
  980
  1,037
  1,097
  1,160
  1,226
  1,296
  1,369
  1,447
  1,528
  1,614
Earnings before tax, $m
  1,593
  1,535
  1,567
  1,603
  1,643
  1,687
  1,736
  1,788
  1,845
  1,906
  1,972
  2,056
  2,130
  2,210
  2,294
  2,383
  2,477
  2,577
  2,683
  2,795
  2,913
  3,037
  3,168
  3,306
  3,452
  3,605
  3,766
  3,936
  4,115
  4,303
  4,500
Tax expense, $m
  410
  414
  423
  433
  444
  456
  469
  483
  498
  515
  532
  555
  575
  597
  619
  643
  669
  696
  724
  755
  786
  820
  855
  893
  932
  973
  1,017
  1,063
  1,111
  1,162
  1,215
Net income, $m
  1,183
  1,120
  1,144
  1,170
  1,199
  1,232
  1,267
  1,306
  1,347
  1,392
  1,439
  1,501
  1,555
  1,613
  1,674
  1,740
  1,809
  1,882
  1,959
  2,040
  2,126
  2,217
  2,313
  2,414
  2,520
  2,632
  2,749
  2,873
  3,004
  3,141
  3,285

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  121
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  14,226
  14,389
  14,720
  15,098
  15,523
  15,994
  16,510
  17,072
  17,681
  18,337
  19,040
  19,793
  20,597
  21,452
  22,361
  23,326
  24,348
  25,430
  26,574
  27,783
  29,060
  30,407
  31,827
  33,325
  34,902
  36,564
  38,313
  40,155
  42,092
  44,131
  46,275
Adjusted assets (=assets-cash), $m
  14,105
  14,389
  14,720
  15,098
  15,523
  15,994
  16,510
  17,072
  17,681
  18,337
  19,040
  19,793
  20,597
  21,452
  22,361
  23,326
  24,348
  25,430
  26,574
  27,783
  29,060
  30,407
  31,827
  33,325
  34,902
  36,564
  38,313
  40,155
  42,092
  44,131
  46,275
Revenue / Adjusted assets
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
Average production assets, $m
  12,207
  12,450
  12,736
  13,064
  13,431
  13,838
  14,285
  14,772
  15,298
  15,866
  16,475
  17,126
  17,821
  18,561
  19,348
  20,182
  21,067
  22,003
  22,993
  24,039
  25,144
  26,309
  27,538
  28,834
  30,199
  31,637
  33,150
  34,743
  36,420
  38,184
  40,039
Working capital, $m
  -250
  -358
  -366
  -375
  -386
  -397
  -410
  -424
  -439
  -456
  -473
  -492
  -512
  -533
  -556
  -580
  -605
  -632
  -660
  -690
  -722
  -756
  -791
  -828
  -867
  -909
  -952
  -998
  -1,046
  -1,097
  -1,150
Total debt, $m
  6,427
  6,618
  6,871
  7,160
  7,485
  7,844
  8,239
  8,668
  9,133
  9,634
  10,172
  10,747
  11,361
  12,014
  12,709
  13,446
  14,227
  15,053
  15,928
  16,851
  17,827
  18,856
  19,941
  21,085
  22,290
  23,560
  24,896
  26,303
  27,784
  29,341
  30,979
Total liabilities, $m
  10,802
  10,993
  11,246
  11,535
  11,860
  12,219
  12,614
  13,043
  13,508
  14,009
  14,547
  15,122
  15,736
  16,389
  17,084
  17,821
  18,602
  19,428
  20,303
  21,226
  22,202
  23,231
  24,316
  25,460
  26,665
  27,935
  29,271
  30,678
  32,159
  33,716
  35,354
Total equity, $m
  3,424
  3,396
  3,474
  3,563
  3,663
  3,775
  3,896
  4,029
  4,173
  4,327
  4,494
  4,671
  4,861
  5,063
  5,277
  5,505
  5,746
  6,001
  6,271
  6,557
  6,858
  7,176
  7,511
  7,865
  8,237
  8,629
  9,042
  9,476
  9,934
  10,415
  10,921
Total liabilities and equity, $m
  14,226
  14,389
  14,720
  15,098
  15,523
  15,994
  16,510
  17,072
  17,681
  18,336
  19,041
  19,793
  20,597
  21,452
  22,361
  23,326
  24,348
  25,429
  26,574
  27,783
  29,060
  30,407
  31,827
  33,325
  34,902
  36,564
  38,313
  40,154
  42,093
  44,131
  46,275
Debt-to-equity ratio
  1.877
  1.950
  1.980
  2.010
  2.040
  2.080
  2.110
  2.150
  2.190
  2.230
  2.260
  2.300
  2.340
  2.370
  2.410
  2.440
  2.480
  2.510
  2.540
  2.570
  2.600
  2.630
  2.650
  2.680
  2.710
  2.730
  2.750
  2.780
  2.800
  2.820
  2.840
Adjusted equity ratio
  0.234
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,183
  1,120
  1,144
  1,170
  1,199
  1,232
  1,267
  1,306
  1,347
  1,392
  1,439
  1,501
  1,555
  1,613
  1,674
  1,740
  1,809
  1,882
  1,959
  2,040
  2,126
  2,217
  2,313
  2,414
  2,520
  2,632
  2,749
  2,873
  3,004
  3,141
  3,285
Depreciation, amort., depletion, $m
  474
  491
  502
  515
  529
  544
  561
  580
  600
  622
  645
  656
  683
  711
  741
  773
  807
  843
  881
  921
  963
  1,008
  1,055
  1,105
  1,157
  1,212
  1,270
  1,331
  1,395
  1,463
  1,534
Funds from operations, $m
  1,505
  1,611
  1,646
  1,685
  1,728
  1,776
  1,829
  1,886
  1,947
  2,014
  2,085
  2,157
  2,238
  2,324
  2,416
  2,513
  2,616
  2,725
  2,840
  2,961
  3,090
  3,225
  3,368
  3,518
  3,677
  3,844
  4,020
  4,205
  4,399
  4,604
  4,819
Change in working capital, $m
  -41
  -7
  -8
  -9
  -11
  -12
  -13
  -14
  -15
  -16
  -17
  -19
  -20
  -21
  -23
  -24
  -25
  -27
  -28
  -30
  -32
  -33
  -35
  -37
  -39
  -41
  -43
  -46
  -48
  -51
  -53
Cash from operations, $m
  1,546
  1,771
  1,654
  1,694
  1,739
  1,788
  1,841
  1,900
  1,962
  2,030
  2,102
  2,176
  2,258
  2,345
  2,438
  2,537
  2,641
  2,751
  2,868
  2,991
  3,121
  3,259
  3,403
  3,556
  3,716
  3,885
  4,063
  4,250
  4,447
  4,655
  4,873
Maintenance CAPEX, $m
  0
  -468
  -477
  -488
  -501
  -515
  -530
  -547
  -566
  -586
  -608
  -631
  -656
  -683
  -711
  -741
  -773
  -807
  -843
  -881
  -921
  -963
  -1,008
  -1,055
  -1,105
  -1,157
  -1,212
  -1,270
  -1,331
  -1,395
  -1,463
New CAPEX, $m
  -875
  -243
  -286
  -327
  -367
  -407
  -447
  -487
  -527
  -567
  -609
  -651
  -695
  -740
  -787
  -835
  -884
  -936
  -990
  -1,046
  -1,105
  -1,165
  -1,229
  -1,296
  -1,365
  -1,438
  -1,514
  -1,593
  -1,677
  -1,764
  -1,855
Cash from investing activities, $m
  -791
  -711
  -763
  -815
  -868
  -922
  -977
  -1,034
  -1,093
  -1,153
  -1,217
  -1,282
  -1,351
  -1,423
  -1,498
  -1,576
  -1,657
  -1,743
  -1,833
  -1,927
  -2,026
  -2,128
  -2,237
  -2,351
  -2,470
  -2,595
  -2,726
  -2,863
  -3,008
  -3,159
  -3,318
Free cash flow, $m
  755
  1,061
  891
  879
  871
  866
  864
  866
  870
  876
  885
  893
  907
  923
  941
  961
  983
  1,008
  1,035
  1,064
  1,096
  1,130
  1,166
  1,205
  1,246
  1,290
  1,337
  1,387
  1,440
  1,495
  1,554
Issuance/(repayment) of debt, $m
  -34
  210
  253
  289
  324
  360
  395
  430
  465
  501
  538
  575
  614
  653
  694
  737
  781
  827
  874
  924
  975
  1,029
  1,085
  1,144
  1,205
  1,269
  1,337
  1,407
  1,480
  1,557
  1,638
Issuance/(repurchase) of shares, $m
  -880
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -916
  210
  253
  289
  324
  360
  395
  430
  465
  501
  538
  575
  614
  653
  694
  737
  781
  827
  874
  924
  975
  1,029
  1,085
  1,144
  1,205
  1,269
  1,337
  1,407
  1,480
  1,557
  1,638
Total cash flow (excl. dividends), $m
  -171
  1,271
  1,144
  1,168
  1,195
  1,226
  1,259
  1,295
  1,335
  1,377
  1,423
  1,468
  1,520
  1,576
  1,635
  1,698
  1,764
  1,835
  1,909
  1,988
  2,071
  2,159
  2,251
  2,349
  2,452
  2,560
  2,674
  2,794
  2,920
  3,053
  3,193
Retained Cash Flow (-), $m
  126
  -74
  -78
  -89
  -100
  -111
  -122
  -133
  -144
  -155
  -166
  -178
  -190
  -202
  -215
  -228
  -241
  -255
  -270
  -285
  -301
  -318
  -335
  -353
  -372
  -392
  -413
  -435
  -457
  -481
  -506
Prev. year cash balance distribution, $m
 
  102
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  1,299
  1,065
  1,079
  1,095
  1,115
  1,137
  1,163
  1,191
  1,223
  1,257
  1,290
  1,331
  1,374
  1,421
  1,470
  1,523
  1,579
  1,639
  1,703
  1,770
  1,841
  1,916
  1,995
  2,079
  2,168
  2,261
  2,359
  2,463
  2,572
  2,687
Discount rate, %
 
  8.80
  9.24
  9.70
  10.19
  10.70
  11.23
  11.79
  12.38
  13.00
  13.65
  14.33
  15.05
  15.80
  16.59
  17.42
  18.29
  19.21
  20.17
  21.18
  22.24
  23.35
  24.52
  25.74
  27.03
  28.38
  29.80
  31.29
  32.85
  34.50
  36.22
PV of cash for distribution, $m
 
  1,194
  893
  817
  743
  671
  600
  533
  468
  407
  350
  296
  247
  204
  166
  132
  104
  80
  60
  44
  32
  22
  15
  10
  7
  4
  3
  2
  1
  0
  0
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

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 finished vehicles and machinery, automotive parts, chemicals and plastics, crude, and metals and minerals, as well as forest and industrial, and consumer products. It also transports intermodal traffic comprising retail goods in overseas containers that can be transported by train, ship, and truck, as well as in domestic containers and trailers that can be moved by train and truck. The company offers rail and intermodal transportation services over a network of approximately 12,400 miles, serving the business centers of Canada from Montreal, Quebec to Vancouver, British Columbia; and the United States Northeast and Midwest regions. In addition, the company offers transload, leasing, and logistics services. Canadian Pacific Railway Limited was founded in 1881 and is headquartered in Calgary, Canada.

FINANCIAL RATIOS  of  Canadian Pacific Railway (CP)

Valuation Ratios
P/E Ratio 19.5
Price to Sales 5
Price to Book 6.7
Price to Tangible Book
Price to Cash Flow 14.9
Price to Free Cash Flow 34.3
Growth Rates
Sales Growth Rate -7.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -22.4%
Cap. Spend. - 3 Yr. Gr. Rate -0.9%
Financial Strength
Quick Ratio 6
Current Ratio 0.1
LT Debt to Equity 187.1%
Total Debt to Equity 187.7%
Interest Coverage 5
Management Effectiveness
Return On Assets 10.1%
Ret/ On Assets - 3 Yr. Avg. 9.6%
Return On Total Capital 11.8%
Ret/ On T. Cap. - 3 Yr. Avg. 11.7%
Return On Equity 33.9%
Return On Equity - 3 Yr. Avg. 27.7%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 88%
Gross Margin - 3 Yr. Avg. 85.3%
EBITDA Margin 52.6%
EBITDA Margin - 3 Yr. Avg. 46.5%
Operating Margin 41%
Oper. Margin - 3 Yr. Avg. 38.8%
Pre-Tax Margin 34.5%
Pre-Tax Margin - 3 Yr. Avg. 31.5%
Net Profit Margin 25.6%
Net Profit Margin - 3 Yr. Avg. 22.7%
Effective Tax Rate 25.7%
Eff/ Tax Rate - 3 Yr. Avg. 28.1%
Payout Ratio 16%

CP stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CP stock intrinsic value calculation we used $4613 million for the last fiscal year's total revenue generated by Canadian Pacific Railway. The default revenue input number comes from 2016 income statement of Canadian Pacific Railway. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our CP stock valuation model: a) initial revenue growth rate of 2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 8.8%, whose default value for CP is calculated based on our internal credit rating of Canadian Pacific Railway, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Canadian Pacific Railway.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of CP stock the variable cost ratio is equal to 59.9%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for CP stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.5% for Canadian Pacific Railway.

Corporate tax rate of 27% is the nominal tax rate for Canadian Pacific Railway. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the CP stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for CP are equal to 264.6%.

Life of production assets of 26.1 years is the average useful life of capital assets used in Canadian Pacific Railway operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for CP is equal to -7.6%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $3424 million for Canadian Pacific Railway - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 145.385 million for Canadian Pacific Railway is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Canadian Pacific Railway at the current share price and the inputted number of shares is $22.9 billion.


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COMPANY NEWS

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▶ GCT Deltaport welcomes largest vessel to call Canada   [May-08-17 08:00AM  Marketwired]
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▶ Railroad operator CP Rail's profit tops estimates   [Apr-19-17 07:21PM  Reuters]
▶ [$$] Canadian Pacific Railway Profit Edges Down   [05:00PM  The Wall Street Journal]
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▶ [$$] Canadian Railroad Earnings: What to Watch   [01:47PM  The Wall Street Journal]
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▶ Canadian Pacific: Domestic Intermodal Growth Matters   [Apr-12-17 10:36AM  Market Realist]
▶ First Quarter Analysis: Winners and Losers in Industrials   [Apr-05-17 01:25PM  Investopedia]
▶ Solid Growth in Volumes without Coal Raises CNIs Carloads   [Apr-04-17 09:06AM  Market Realist]
▶ Canadian Pacific: Domestic Intermodal Lifts Its Volumes   [Mar-31-17 03:38PM  Market Realist]
▶ Canadian Pacific announces filing of Proxy Statement   [Mar-15-17 09:12PM  PR Newswire]
▶ Bill Ackman's Greatest Hits and Misses   [11:13AM  at Investopedia]
Stock chart of CP Financial statements of CP Annual reports of CP
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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