Canadian Pacific Kansas Provides Multi-Year Guidance; Plans New Direct CP-CSX Interchange Connection In Alabama

Canadian Pacific Kansas City Ltd CP issued new multi-year guidance as part of its FY23 Investor Day Presentation.

The company provided Financial targets for 2024-2028. It anticipates a revenue compound annual growth rate (CAGR) of high-single digits.

The company sees Core adjusted diluted earnings per share (EPS) CAGR of double-digits, along with continued margin improvement through cost control and operating leverage.

CP expects free cash conversion of Core adjusted income of ~90%. The company sees a return to double-digit Adjusted Return on Invested Capital.

"Our success will continue to be driven by our deep bench of industry-leading railroaders, a disciplined approach to capital investment, and a focus on safety and sustainable growth, all further empowered by this new network," commented Keith Creel, President, and Chief Executive Officer.  

FY23 Guidance: Canadian Pacific Kansas City expects core adjusted diluted EPS to grow mid-single digits.

Additionally, the company announced that Canadian Pacific Kansas City, CSX Corporation CSX, and Genesee & Wyoming Inc. had reached agreements that, when completed, will create a new direct CPKC-CSX interchange connection in Alabama.

Under the agreement, CP and CSX would acquire or operate portions of Meridian & Bigbee Railroad, LLC (MNBR), a G&W-owned railway in Mississippi and Alabama, to establish a new freight corridor for shippers that connects Mexico, Texas, and the U.S. Southeast.

"With this new east-west connection taking advantage of each railway's routes and service, we can extend our reach converting more freight traffic to rail and off our highways," commented Keith Creel, CPKC President and CEO.

Price Action: CP shares are trading lower by 1.03% at $79.53 on the last check Wednesday.