Increasing Costs For Canadian Pacific Lead Buckingham Research To Lower Price Target - Canadian Pacific Kansas (NYSE:CP)

Buckingham Research Group reiterated its Buy rating on

Canadian Pacific Railway LimitedCP

, but lowered its EPS and price target estimates.

Referring to the change in price target, the analysts mentioned two important changes:

1. Lowering PT to $157 from $165 in USD based driven by lower freight volumes and more of a currency headwind

2. Converting the price target to Canadian dollars, which gives a figure of C$200.

They also provided upside and downside valuation targets of C$220 and C$145, respectively.

According to the analysts, the reason for the reduction of their EPS estimates to C$10.13 from C$11.10 for 2016 and to C$12.15 from C$12.50 for 2017 is the "increasing cost headwinds for the higher CAD as well as higher fuel prices, and weaker than expected grain and potash shipment this quarter," despite positive aspects such as improved operations and 43 percent increase in the quarterly dividends.

At time of writing, Canadian Pacific was up 1.34 percent on the day, trading at $130.52.

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