Intrinsic value of Canadian Pacific Railway - CP

Previous Close

$178.68

  Intrinsic Value

$54.93

stock screener

  Rating & Target

str. sell

-69%

Previous close

$178.68

 
Intrinsic value

$54.93

 
Up/down potential

-69%

 
Rating

str. sell

*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 26.2

 

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
  2.70
  2.93
  3.14
  3.32
  3.49
  3.64
  3.78
  3.90
  4.01
  4.11
  4.20
  4.28
  4.35
  4.42
  4.47
  4.53
  4.57
  4.62
  4.65
  4.69
  4.72
  4.75
  4.77
  4.80
  4.82
  4.83
  4.85
  4.87
  4.88
  4.89
Revenue, $m
  4,613
  4,738
  4,876
  5,029
  5,196
  5,378
  5,574
  5,784
  6,010
  6,251
  6,508
  6,781
  7,071
  7,379
  7,704
  8,049
  8,413
  8,798
  9,204
  9,633
  10,085
  10,561
  11,062
  11,590
  12,146
  12,731
  13,347
  13,994
  14,675
  15,391
  16,144
Variable operating expenses, $m
 
  2,837
  2,920
  3,011
  3,111
  3,219
  3,336
  3,461
  3,596
  3,739
  3,892
  4,041
  4,214
  4,397
  4,591
  4,797
  5,014
  5,243
  5,485
  5,741
  6,010
  6,294
  6,592
  6,907
  7,238
  7,587
  7,954
  8,340
  8,745
  9,172
  9,621
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
  2,837
  2,920
  3,011
  3,111
  3,219
  3,336
  3,461
  3,596
  3,739
  3,892
  4,041
  4,214
  4,397
  4,591
  4,797
  5,014
  5,243
  5,485
  5,741
  6,010
  6,294
  6,592
  6,907
  7,238
  7,587
  7,954
  8,340
  8,745
  9,172
  9,621
Operating income, $m
  1,890
  1,900
  1,956
  2,018
  2,086
  2,159
  2,238
  2,323
  2,414
  2,512
  2,615
  2,740
  2,857
  2,981
  3,113
  3,252
  3,400
  3,555
  3,719
  3,892
  4,075
  4,267
  4,470
  4,683
  4,908
  5,144
  5,393
  5,654
  5,930
  6,219
  6,523
EBITDA, $m
  2,364
  2,395
  2,465
  2,542
  2,626
  2,718
  2,817
  2,924
  3,038
  3,159
  3,289
  3,427
  3,574
  3,729
  3,894
  4,068
  4,252
  4,447
  4,652
  4,869
  5,097
  5,338
  5,591
  5,858
  6,139
  6,435
  6,746
  7,073
  7,417
  7,779
  8,160
Interest expense (income), $m
  361
  352
  368
  386
  406
  427
  450
  476
  503
  532
  563
  596
  631
  668
  708
  749
  794
  841
  890
  942
  997
  1,055
  1,116
  1,181
  1,249
  1,320
  1,395
  1,474
  1,558
  1,645
  1,737
Earnings before tax, $m
  1,593
  1,548
  1,588
  1,632
  1,680
  1,732
  1,788
  1,847
  1,912
  1,980
  2,053
  2,144
  2,226
  2,313
  2,405
  2,503
  2,606
  2,714
  2,829
  2,950
  3,078
  3,212
  3,353
  3,502
  3,659
  3,824
  3,997
  4,180
  4,372
  4,574
  4,786
Tax expense, $m
  410
  418
  429
  441
  454
  468
  483
  499
  516
  535
  554
  579
  601
  625
  649
  676
  704
  733
  764
  797
  831
  867
  905
  946
  988
  1,032
  1,079
  1,129
  1,180
  1,235
  1,292
Net income, $m
  1,183
  1,130
  1,159
  1,191
  1,226
  1,264
  1,305
  1,349
  1,395
  1,445
  1,499
  1,565
  1,625
  1,689
  1,756
  1,827
  1,902
  1,982
  2,065
  2,154
  2,247
  2,345
  2,448
  2,557
  2,671
  2,791
  2,918
  3,051
  3,191
  3,339
  3,494

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
  14,488
  14,912
  15,380
  15,891
  16,446
  17,045
  17,689
  18,379
  19,116
  19,901
  20,737
  21,624
  22,565
  23,561
  24,615
  25,729
  26,906
  28,148
  29,458
  30,840
  32,295
  33,829
  35,444
  37,144
  38,933
  40,815
  42,795
  44,878
  47,068
  49,370
Adjusted assets (=assets-cash), $m
  14,105
  14,488
  14,912
  15,380
  15,891
  16,446
  17,045
  17,689
  18,379
  19,116
  19,901
  20,737
  21,624
  22,565
  23,561
  24,615
  25,729
  26,906
  28,148
  29,458
  30,840
  32,295
  33,829
  35,444
  37,144
  38,933
  40,815
  42,795
  44,878
  47,068
  49,370
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
  12,536
  12,903
  13,308
  13,750
  14,230
  14,748
  15,305
  15,902
  16,540
  17,219
  17,942
  18,710
  19,524
  20,386
  21,298
  22,262
  23,280
  24,355
  25,489
  26,684
  27,943
  29,270
  30,667
  32,138
  33,686
  35,315
  37,028
  38,830
  40,725
  42,717
Working capital, $m
  -250
  -360
  -371
  -382
  -395
  -409
  -424
  -440
  -457
  -475
  -495
  -515
  -537
  -561
  -586
  -612
  -639
  -669
  -700
  -732
  -766
  -803
  -841
  -881
  -923
  -968
  -1,014
  -1,064
  -1,115
  -1,170
  -1,227
Total debt, $m
  6,427
  6,694
  7,018
  7,375
  7,766
  8,190
  8,647
  9,139
  9,666
  10,229
  10,830
  11,468
  12,146
  12,864
  13,626
  14,431
  15,282
  16,181
  17,130
  18,131
  19,187
  20,299
  21,470
  22,704
  24,003
  25,370
  26,808
  28,321
  29,912
  31,585
  33,344
Total liabilities, $m
  10,802
  11,069
  11,393
  11,750
  12,141
  12,565
  13,022
  13,514
  14,041
  14,604
  15,205
  15,843
  16,521
  17,239
  18,001
  18,806
  19,657
  20,556
  21,505
  22,506
  23,562
  24,674
  25,845
  27,079
  28,378
  29,745
  31,183
  32,696
  34,287
  35,960
  37,719
Total equity, $m
  3,424
  3,419
  3,519
  3,630
  3,750
  3,881
  4,023
  4,175
  4,337
  4,511
  4,697
  4,894
  5,103
  5,325
  5,560
  5,809
  6,072
  6,350
  6,643
  6,952
  7,278
  7,622
  7,984
  8,365
  8,766
  9,188
  9,632
  10,100
  10,591
  11,108
  11,651
Total liabilities and equity, $m
  14,226
  14,488
  14,912
  15,380
  15,891
  16,446
  17,045
  17,689
  18,378
  19,115
  19,902
  20,737
  21,624
  22,564
  23,561
  24,615
  25,729
  26,906
  28,148
  29,458
  30,840
  32,296
  33,829
  35,444
  37,144
  38,933
  40,815
  42,796
  44,878
  47,068
  49,370
Debt-to-equity ratio
  1.877
  1.960
  1.990
  2.030
  2.070
  2.110
  2.150
  2.190
  2.230
  2.270
  2.310
  2.340
  2.380
  2.420
  2.450
  2.480
  2.520
  2.550
  2.580
  2.610
  2.640
  2.660
  2.690
  2.710
  2.740
  2.760
  2.780
  2.800
  2.820
  2.840
  2.860
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
  1,130
  1,159
  1,191
  1,226
  1,264
  1,305
  1,349
  1,395
  1,445
  1,499
  1,565
  1,625
  1,689
  1,756
  1,827
  1,902
  1,982
  2,065
  2,154
  2,247
  2,345
  2,448
  2,557
  2,671
  2,791
  2,918
  3,051
  3,191
  3,339
  3,494
Depreciation, amort., depletion, $m
  474
  494
  508
  524
  541
  559
  579
  601
  623
  648
  674
  687
  717
  748
  781
  816
  853
  892
  933
  977
  1,022
  1,071
  1,121
  1,175
  1,231
  1,291
  1,353
  1,419
  1,488
  1,560
  1,637
Funds from operations, $m
  1,505
  1,624
  1,668
  1,715
  1,767
  1,823
  1,884
  1,949
  2,019
  2,093
  2,172
  2,253
  2,342
  2,437
  2,537
  2,643
  2,755
  2,874
  2,998
  3,130
  3,269
  3,415
  3,569
  3,732
  3,902
  4,082
  4,271
  4,470
  4,679
  4,899
  5,130
Change in working capital, $m
  -41
  -9
  -11
  -12
  -13
  -14
  -15
  -16
  -17
  -18
  -20
  -21
  -22
  -23
  -25
  -26
  -28
  -29
  -31
  -33
  -34
  -36
  -38
  -40
  -42
  -44
  -47
  -49
  -52
  -54
  -57
Cash from operations, $m
  1,546
  1,634
  1,678
  1,727
  1,780
  1,837
  1,899
  1,965
  2,036
  2,111
  2,192
  2,274
  2,364
  2,460
  2,562
  2,669
  2,783
  2,903
  3,029
  3,163
  3,303
  3,451
  3,607
  3,772
  3,945
  4,127
  4,318
  4,519
  4,731
  4,954
  5,188
Maintenance CAPEX, $m
  0
  -468
  -480
  -494
  -510
  -527
  -545
  -565
  -586
  -609
  -634
  -660
  -687
  -717
  -748
  -781
  -816
  -853
  -892
  -933
  -977
  -1,022
  -1,071
  -1,121
  -1,175
  -1,231
  -1,291
  -1,353
  -1,419
  -1,488
  -1,560
New CAPEX, $m
  -875
  -329
  -367
  -405
  -442
  -480
  -518
  -557
  -597
  -638
  -680
  -723
  -768
  -814
  -862
  -912
  -964
  -1,018
  -1,075
  -1,134
  -1,195
  -1,260
  -1,327
  -1,397
  -1,471
  -1,548
  -1,629
  -1,713
  -1,802
  -1,895
  -1,992
Cash from investing activities, $m
  -791
  -797
  -847
  -899
  -952
  -1,007
  -1,063
  -1,122
  -1,183
  -1,247
  -1,314
  -1,383
  -1,455
  -1,531
  -1,610
  -1,693
  -1,780
  -1,871
  -1,967
  -2,067
  -2,172
  -2,282
  -2,398
  -2,518
  -2,646
  -2,779
  -2,920
  -3,066
  -3,221
  -3,383
  -3,552
Free cash flow, $m
  755
  837
  831
  828
  828
  830
  836
  843
  853
  865
  879
  891
  909
  929
  952
  976
  1,003
  1,032
  1,063
  1,096
  1,131
  1,169
  1,210
  1,253
  1,299
  1,347
  1,399
  1,453
  1,510
  1,571
  1,635
Issuance/(repayment) of debt, $m
  -34
  286
  324
  357
  391
  424
  458
  492
  527
  563
  600
  638
  678
  719
  761
  805
  851
  899
  949
  1,001
  1,055
  1,112
  1,172
  1,234
  1,299
  1,367
  1,438
  1,513
  1,591
  1,673
  1,759
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
  286
  324
  357
  391
  424
  458
  492
  527
  563
  600
  638
  678
  719
  761
  805
  851
  899
  949
  1,001
  1,055
  1,112
  1,172
  1,234
  1,299
  1,367
  1,438
  1,513
  1,591
  1,673
  1,759
Total cash flow (excl. dividends), $m
  -171
  1,123
  1,155
  1,185
  1,218
  1,254
  1,293
  1,335
  1,380
  1,428
  1,479
  1,529
  1,587
  1,648
  1,713
  1,782
  1,854
  1,931
  2,012
  2,097
  2,187
  2,282
  2,382
  2,487
  2,598
  2,714
  2,837
  2,966
  3,101
  3,244
  3,394
Retained Cash Flow (-), $m
  126
  -97
  -100
  -110
  -121
  -131
  -141
  -152
  -163
  -174
  -185
  -197
  -209
  -222
  -235
  -249
  -263
  -278
  -293
  -309
  -326
  -344
  -362
  -381
  -401
  -422
  -444
  -467
  -491
  -517
  -543
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
 
  1,128
  1,055
  1,075
  1,098
  1,123
  1,152
  1,183
  1,217
  1,254
  1,293
  1,332
  1,378
  1,426
  1,478
  1,533
  1,591
  1,653
  1,718
  1,788
  1,861
  1,938
  2,020
  2,106
  2,196
  2,292
  2,392
  2,498
  2,610
  2,727
  2,851
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
 
  1,037
  884
  814
  745
  676
  608
  542
  478
  417
  360
  305
  256
  212
  172
  138
  108
  83
  63
  46
  34
  24
  16
  11
  7
  4
  3
  2
  1
  1
  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 operates through rail transportation segment. The Company's transports bulk commodities, merchandise freight, and intermodal traffic over a network of approximately 12,400 miles. Its railway feeds directly into the United States heartland from the east and west coasts. Its Bulk commodities include grain, coal, potash, fertilizers and sulfur. Its Merchandise freight consists of finished vehicles and machinery, as well as forest and industrial and consumer products. Its Intermodal traffic consists of retail goods in overseas containers that can be transported by train, ship and truck and in domestic containers and trailers that can be moved by train and truck. Its subsidiaries include Canadian Pacific Railway Company, Soo Line Railroad Company, Delaware and Hudson Railway Company, Inc. and Mount Stephen Properties Inc.

FINANCIAL RATIOS  of  Canadian Pacific Railway (CP)

Valuation Ratios
P/E Ratio 22.1
Price to Sales 5.7
Price to Book 7.6
Price to Tangible Book
Price to Cash Flow 16.9
Price to Free Cash Flow 39
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 2.7% 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 146.501 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 $26.2 billion.

RELATED COMPANIES Price Int.Val. Rating
CNI Canadian Natio 80.35 21.09  str.sell
GWR Genesee&Wyomin 77.42 36.41  str.sell
NSC Norfolk Southe 141.11 27.17  str.sell
UNP Union Pacific 130.60 63.02  sell
CSX CSX 52.93 15.71  str.sell
KSU Kansas City So 110.96 9.70  str.sell

COMPANY NEWS

▶ [$$] CSX Chief Harrison Dies Amid Turnaround Effort   [Dec-17-17 12:05PM  The Wall Street Journal]
▶ CSX CEO Hunter Harrison Dies at Age 73   [03:24PM  TheStreet.com]
▶ US Rail Freight Traffic Gained Momentum in Week 48   [Dec-13-17 07:36AM  Market Realist]
▶ How Canadian Pacific Railways Carload Traffic Trended   [Dec-06-17 09:02AM  Market Realist]
▶ How US Railroads Operating Margin Growth Looked in 3Q17   [Dec-01-17 10:32AM  Market Realist]
▶ Week 46: How Canadian Pacifics Carloads Fared   [Nov-28-17 11:07AM  Market Realist]
▶ Canadian Pacific Railways Returns in 2017   [Nov-24-17 09:01AM  Market Realist]
▶ Canadian Pacific Railways Low Yield, Uneven Dividend Growth   [Nov-23-17 05:15PM  Market Realist]
▶ Canadian Pacific Railway Limited declares dividend   [Nov-22-17 12:12PM  CNW Group]
▶ What Led the Rise in Canadian Pacifics Carloads Last Week?   [Nov-21-17 01:21PM  Market Realist]
▶ Inside Canadian National Railways Freight Volumes in Week 44   [Nov-16-17 09:02AM  Market Realist]
▶ Week 41: US Rail Freight Traffic Up, Canada and Mexico Slide   [Oct-20-17 04:02PM  Market Realist]
▶ Canadian Pacific Turns in Solid Execution   [08:36AM  Morningstar]
▶ CSX Nears Buy Point But Autos Weigh On Q3 Volume   [Oct-17-17 05:04PM  Investor's Business Daily]
▶ Canadian Pacific meets 3Q profit forecasts   [04:17PM  Associated Press]
Financial statements 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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