CP
Canadian Pacific Railway Limited (CP)
Last Price$73.1(1.6%)
Market Cap$67.6B
DCF value
$44.3
Overvalued (DCF value)
(39.4%)
Discount Rate
6.0%
Long-Term Growth Rate
2.0%
Stock quality
6/10
Good

CP DCF Model

Free Cash Flow to Firm Model
NOPAT Model
Free Cash Flow to Equity Model
Net Income Model
Millions
Billions
Dec'20 ActualDec'21 ActualDec'22 ActualDec'23 ActualDec'24 ActualDec'25 EstimateDec'26 EstimateDec'27 EstimateDec'28 EstimateDec'29 EstimateDec'30 EstimateDec'31 EstimateDec'32 EstimateDec'33 EstimateDec'34 EstimateDec'35 Terminal
% growth
7,710.0
(1.1%)
7,995.0
3.7%
8,814.0
10.2%
12,555.0
42.4%
14,546.0
15.9%
15,741.8
8.2%
16,860.3
7.1%
18,335.6
8.8%
19,629.6
7.1%
20,492.1
4.4%
21,310.7
4.0%
22,077.0
3.6%
22,782.8
3.2%
23,420.2
2.8%
23,982.1
2.4%
24,461.7
2.0%
3,311.0
42.9%
3,206.0
40.1%
4,797.0
54.4%
4,388.0
35.0%
5,179.0
35.6%
5,058.1
32.1%
5,417.5
32.1%
5,891.5
32.1%
6,307.3
32.1%
6,584.4
32.1%
6,847.5
32.1%
7,093.7
32.1%
7,320.5
32.1%
7,525.3
32.1%
7,705.8
32.1%
7,859.9
32.1%
NOPAT
% effective tax rate
2,527.2
32.8%
2,525.8
31.6%
4,070.2
46.2%
(5,638.4)
(44.9%)
4,029.7
27.7%
3,935.6
25.0%
4,215.2
25.0%
4,584.1
25.0%
4,907.6
25.0%
5,123.2
25.0%
5,327.9
25.0%
5,519.5
25.0%
5,695.9
25.0%
5,855.3
25.0%
5,995.7
25.0%
6,115.7
25.0%
% of revenue
789.0
10.2%
821.0
10.3%
861.0
9.8%
1,543.0
12.3%
1,900.0
13.1%
1,842.9
11.7%
1,973.8
11.7%
2,146.5
11.7%
2,298.0
11.7%
2,399.0
11.7%
2,494.8
11.7%
2,584.5
11.7%
2,667.1
11.7%
2,741.8
11.7%
2,807.5
11.7%
2,863.7
11.7%
% of revenue
(1,671.0)
(21.7%)
(1,532.0)
(19.2%)
(1,557.0)
(17.7%)
(2,499.0)
(19.9%)
(2,863.0)
(19.7%)
(3,004.2)
(19.1%)
(3,217.6)
(19.1%)
(3,499.2)
(19.1%)
(3,746.1)
(19.1%)
(3,910.7)
(19.1%)
(4,066.9)
(19.1%)
(4,213.2)
(19.1%)
(4,347.9)
(19.1%)
(4,469.5)
(19.1%)
(4,576.7)
(19.1%)
(4,668.3)
(19.1%)
(389.0)
(5.0%)
(66.0)
(0.8%)
(92.0)
(1.0%)
(365.0)
(2.9%)
24.0
0.2%
(198.7)
(1.3%)
(212.8)
(1.3%)
(231.4)
(1.3%)
(247.7)
(1.3%)
(258.6)
(1.3%)
(268.9)
(1.3%)
(278.6)
(1.3%)
(287.5)
(1.3%)
(295.6)
(1.3%)
(302.7)
(1.3%)
(308.7)
(1.3%)
Free Cash Flow to Firm (FCFF)
% of revenue
1,256.2
16.3%
1,748.8
21.9%
3,282.2
37.2%
(6,959.4)
(55.4%)
3,090.7
21.2%
2,575.6
16.4%
2,758.6
16.4%
3,000.0
16.4%
3,211.8
16.4%
3,352.9
16.4%
3,486.8
16.4%
3,612.2
16.4%
3,727.7
16.4%
3,832.0
16.4%
3,923.9
16.4%
4,002.4
16.4%
% of FCFF used in calculation
80.8%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Discount period
0.50
1.50
2.50
3.50
4.50
5.50
6.50
7.50
8.50
9.50
Discount factor
0.97
0.92
0.86
0.81
0.77
0.72
0.68
0.64
0.61
0.57
Discounted FCFF (DFCFF)
2,021.5
2,526.2
2,590.7
2,615.4
2,574.7
2,525.0
2,466.7
2,400.5
2,327.0
2,247.0

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CP DCF Value

DCF Value Calculation

as of Mar 11, 2025
Sum of DFCFF
% share of EV
24.3B
30.0%
Terminal Value (TV)
99.0B
Discounted TV
% share of EV
56.7B
70.0%
Total Debt
22.6B
Shares outstanding
925.4M
FX rate
0.7
39.4% overvalued

Equity Value Bridge

CP DCF Financials

Revenue
CA$14.5B -> CA$24.0B 5.1% CAGR
Operating Income
CA$5,179.0M -> CA$7,705.8M 4.1% CAGR
FCFF
CA$3,090.7M -> CA$3,923.9M 2.4% CAGR

CP DCF sensitivity

DCF value
Long-term Terminal growth rate
1.0%
1.5%
2.0%
2.5%
3.0%
WACC
5.0%
$47.0
$47.0
$47.0
$47.0
$47.0
5.5%
$42.0
$46.0
$46.0
$46.0
$46.0
6.0%
$36.0
$40.0
$44.0
$44.0
$44.0
6.5%
$31.0
$34.0
$38.0
$43.0
$43.0
7.0%
$27.0
$30.0
$33.0
$36.0
$40.0
DCF value, undervalued / overvalued
Long-term Terminal growth rate
1.0%
1.5%
2.0%
2.5%
3.0%
WACC
5.0%
(36.0%)
(36.0%)
(36.0%)
(36.0%)
(36.0%)
5.5%
(43.0%)
(37.0%)
(37.0%)
(37.0%)
(37.0%)
6.0%
(51.0%)
(45.0%)
(40.0%)
(40.0%)
(40.0%)
6.5%
(58.0%)
(53.0%)
(48.0%)
(41.0%)
(41.0%)
7.0%
(63.0%)
(59.0%)
(55.0%)
(51.0%)
(45.0%)

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FAQ

What is Canadian Pacific Railway Limited DCF (discounted cash flow) valuation?

As of Mar 11, 2025, Canadian Pacific Railway Limited's Discounted Cash Flow (DCF) valuation estimates its share price at $44.3. This suggests it may be overvalued by (39.4%) compared to its current price of around $73.1, using a WACC of 6.0% and growth rates of 2.0%.

What is Canadian Pacific Railway Limited WACC?

As of Mar 11, 2025, Canadian Pacific Railway Limited's Weighted Average Cost of Capital (WACC) is approximately 6.0%.

What is Canadian Pacific Railway Limited Enterprise Value?

As of Mar 11, 2025, Canadian Pacific Railway Limited's Enterprise Value (EV) is approximately CA$81.0B. This value reflects the company's total market capitalization plus debt, minus cash and cash equivalents, providing a comprehensive measure of its overall value in the market.