Railroads · NYSE
Current Price
$84.28
Intrinsic Value
Use the calculator below to estimate
Run a full DCF analysis on Canadian Pacific Kansas City Ltd. with auto-filled fundamentals, adjustable assumptions, and sensitivity heatmap.
Canadian Pacific Kansas City Ltd. engages in the provision of rail freight transportation services. It offers rail services linking Canada, the United States and Mexico. The company was founded on June 22, 2001, and is headquartered in Calgary, Canada.
ROIC (TTM)
5.1%
ROE (TTM)
8.9%
FCF Yield
2.10%
Based on trailing twelve-month data, CP shows a free cash flow per share of N/A and a ROIC of 5.1%, key inputs for stock valuation using the DCF method. The P/FCF ratio of N/A and FCF yield of 2.10% are important context metrics when evaluating CP's stock valuation relative to peers.
The intrinsic value of CP depends on assumptions about future growth rate, discount rate (WACC), and terminal value. A DCF model discounts projected free cash flows back to present value — small changes in WACC can shift the estimate by 20% or more, which is why sensitivity analysis is essential.
Whether CP is undervalued depends on comparing the DCF-derived intrinsic value to the current market price of $84.28. A positive margin of safety (intrinsic value above market price) suggests potential undervaluation, but the degree of confidence depends on the reliability of your growth and discount rate assumptions.
To perform a DCF valuation on Canadian Pacific Kansas City Ltd.: (1) Start with the trailing free cash flow per share as the base, (2) project future FCF growth over 5-10 years based on Railroads industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting CP's risk profile, and (4) add a terminal value for cash flows beyond the projection period.
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Canadian Pacific Kansas City Ltd., this means projecting how much free cash flow the Railroads will produce over the next 5-10 years, then discounting those amounts to today's dollars. CP's ROIC of 5.1% suggests the company may face challenges generating returns above its cost of capital.
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For CP, the capital structure and equity risk premium determine WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%.
