Yahoo Finance Strength Seen in Canadian Pacific (CP): Can Its 5.7% Jump Turn into More Strength?
Canadian Pacific (CP) shares rallied 5.7% in the last trading session to close at $77.10. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 8.4% loss over the past four weeks.
The uptick followed the approval by the Surface Transportation Board, the economic regulator that oversees freight railroads, of the deal of Canadian Pacific to takeover Kansas City Southern. The approval paves the way for the creation of the first freight rail network linking Canada, the United States and Mexico. The approval, following the conclusion of the two-year review process, implies that the first major railroad merger has been cleared by regulators in the United States in more than two decades.
This railroad is expected to post quarterly earnings of $0.70 per share in its upcoming report, which represents a year-over-year change of +40%. Revenues are expected to be $2 billion, up 37.5% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.
For Canadian Pacific, the consensus EPS estimate for the quarter has been revised marginally lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on CP going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Canadian Pacific is part of the Zacks Transportation - Rail industry. Union Pacific (UNP), another stock in the same industry, closed the last trading session 1.6% lower at $192.04. UNP has returned -4.4% in the past month.
Union Pacific's consensus EPS estimate for the upcoming report has remained unchanged over the past month at $2.62. Compared to the company's year-ago EPS, this represents a change of +2%. Union Pacific currently boasts a Zacks Rank of #3 (Hold).
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Canadian Pacific Railway Limited (CP) : Free Stock Analysis Report
Union Pacific Corporation (UNP) : Free Stock Analysis Report
