It has been about a month since the last earnings report for Canadian Pacific Kansas City (CP). Shares have added about 14.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Canadian Pacific Kansas City due for a pullback? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent catalysts for Canadian Pacific Kansas City Limited before we dive into how investors and analysts have reacted as of late.
CP's Q4 Earnings Miss Estimates
Canadian Pacific Kansas City reported unimpressive fourth-quarter 2025 results, wherein both earnings and revenues missed the Zacks Consensus Estimate.
Quarterly earnings (excluding 9 cents from non-recurring items) of 95 cents per share missed the Zacks Consensus Estimate of 99 cents. The bottom line improved 3.3% on a year-over-year basis. Operating revenues of $2.81 billion lagged the Zacks Consensus Estimate of $2.86 billion. However, the top line improved 1.6% on a year-over-year basis.
In the reported quarter, total Freight revenues per revenue ton miles grew 1% year over year. Total Freight revenues per carload declined marginally by 0.1% year over year.
On a reported basis, operating income increased 3% year over year. Total operating expenses fell 0.2% year over year. The reported operating ratio (operating expenses as a percentage of revenues) fell 80 basis points to 58.9% from the year-ago quarter.
CP’s Segmental Highlights
Freight revenues, accounting for 98% of the top line, increased 1%. CP’s Freight segment contains Grain (up 4%), Coal (up 3%), Potash (down 2%), Fertilizers and Sulphur (up 1%), Metals, minerals and consumer products (up 3%), Automotive (down 1%) and Intermodal (up 3%). Meanwhile, Energy, chemicals and plastics and Forest products fell 2% and 12%, respectively.
Other revenues increased 26% year over year in the fourth quarter of 2025.
CP’s Liquidity
CP exited the fourth quarter with cash and cash equivalents of C$184 million compared with C$411 million at the prior-quarter end. Long-term debt amounted to C$19.94 billion compared with C$21.59 billion at the prior-quarter end.
CP’s Outlook
Canadian Pacific expects 2026 core adjusted earnings per share to grow in the low double-digits from the 2025 actuals to C$4.61 per share.
The company expects 2026 RTMs to increase in the mid-single digits from the 2025 actuals.
Management expects capital expenditures to be C$2.65 billion for the full year. The core adjusted effective tax rate for 2026 is expected to be 24.75%.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
VGM Scores
At this time, Canadian Pacific Kansas City has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for value investors.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Canadian Pacific Kansas City has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Canadian Pacific Kansas City is part of the Zacks Transportation - Rail industry. Over the past month, CSX (CSX), a stock from the same industry, has gained 12.6%. The company reported its results for the quarter ended December 2025 more than a month ago.
CSX reported revenues of $3.51 billion in the last reported quarter, representing a year-over-year change of -0.9%. EPS of $0.39 for the same period compares with $0.42 a year ago.
CSX is expected to post earnings of $0.40 per share for the current quarter, representing a year-over-year change of +17.7%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.9%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for CSX. Also, the stock has a VGM Score of F.
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Canadian Pacific Kansas City Limited (CP): Free Stock Analysis Report CSX Corporation (CSX): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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