Canadian Pacific Is Initiated At A Buy At Argus

Although tough economic conditions have kept top-line at Canadian Pacific Railway Limited (USA) CP under significant pressure, a bottom seems to be nearing, and a business upturn may be expected in 2017, Argus’ Stephen Biggar said in a report. He initiated coverage of the company with a Buy rating and a price target of $155.

Canadian Pacific is a major railway serving Canada as well as the Northeast and Midwest regions of the US. Canadian Pacific’s recent performance has been impacted by challenging conditions in the global economy as well as in the industries that the company serves. These have adversely impacted the company’s operating performance, analyst Stephen Biggar noted.

Positive View

Following the decline in Canadian Pacific’s shares since late 2014, they already seem to reflect all the issues being faced by the company. Biggar added that the stock was trading “near the bottom of its five-year historical range, and below the 18-times average of its peers,” and appeared attractively valued.

“We also think that CP’s results will soon be bottoming, and believe that it is doing an excellent job of controlling costs,” the analyst wrote, adding that he expected a business upturn in 2017.