UPDATE: Goldman Sachs Downgrades Canadian Pacific To Neutral; Lowers PT To $70

Goldman Sachs is removing the shares of Canadian Pacific CP from its Buy List as it sees more near- term upside for CSX shares. Since it added CP to the Americas Buy List on March 2, 2010 and over the last 12 months, CP stock is up 25.4% and 17.7%, versus the S&P 500 +15.7% and +11.0%, respectively. Goldman continues to view Canadian Pacific's bulk commodity exposure as attractive. However, Goldman expects costs to increase as the company works to add network resources to support higher volume levels. Goldman believes these costs are illustrated in management's recent 1Q2011 guidance of $0.12-$0.22/share, which when it excludes the $0.40 headwind from severe winter weather and fuel, was still well below recent trends. Positive risks include increased export business to Asia and longer trains and other efficiencies driving continued margin expansion. Negative risks include increased margin headwinds in 2011 as the company adds network capacity to support volumes, weak Canadian agriculture outlook, and potential weather-related disruptions that have affected recent quarters. CP closed Tuesday at $64.05