Bernstein Lowers Price Target on CP as Intermodal Shifts Accelerate

Core Insights - Canadian Pacific Kansas City Limited (NYSE:CP) is recognized as one of the best Canadian dividend stocks for long-term investment [1] - Bernstein has lowered its price target for CP from $87.12 to $82.08, citing revenue pressure in Q3 despite stable operating expenses [2] - In Q3 2025, CP reported revenues of C$3.7 billion, a 3% increase from C$3.5 billion year-over-year, with an improved operating ratio of 60.7% and an 11% rise in earnings per share to $1.10 [3] - The merger with Kansas City Southern has positioned CP uniquely with a direct route linking Canada, the U.S., and Mexico, covering approximately 32,000 kilometers of track [4] Financial Performance - CP's Q3 2025 revenue reached C$3.7 billion, reflecting a 3% increase from the previous year [3] - The operating ratio improved by 220 basis points to 60.7%, indicating enhanced operational efficiency [3] - Earnings per share increased by 11% to $1.10, supporting management's full-year earnings growth outlook of 10% to 14% [3] Strategic Advantages - CP's extensive network, established through the merger with Kansas City Southern, provides a competitive edge by connecting key agricultural, industrial, and energy regions across North America [4] - The company maintains manageable debt levels and strong free cash flow, allowing for continued investment in network upgrades while sustaining dividends and share buybacks [4]