Canadian Pacific Kansas City Ltd. (CP) DCF Valuation
Why we don't show a single “fair value” for CP
Even the optimistic scenario of a conservative trailing-FCF model ($28.53) sits far below today's price — the market is paying for growth and durability beyond what this model structure captures. The honest lens is the question below: what growth does today's price actually require? The model scenarios are listed further down for reference.
What would today's price require?
$87.04 is justified only if free cash flow grows about +40.7% a year (fading to 2.5% long-run) at a 10.1% required return — faster than the company has actually grown.
| Scenario | FCF growth (fading to 2.5%) | Discount | Value / share |
|---|---|---|---|
| Conservative | 9.1%/yr | 11.1% | $9.41 |
| Base case | 12.1%/yr | 10.1% | $17.36 |
| Optimistic | 15.1%/yr | 9.1% | $28.53 |
| Analyst DCF (FMP) | independent reference — different model | $23.55 | |
Current Price
$87.04
Market-Implied Growth
+40.7%/yr
vs +8.8% 5Y actual
Base-Case Model Value
$17.36
model output — not a price target
CP DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Opens seeded with TGM's data-driven base case for CP (growth from its own 5-year record, discount from its beta), so the sandbox starts where the scenarios above leave off. Illustrative model — not investment advice.
Base inputs: FCF $1.6B · 0.89B shares · net debt $16.8B
Estimated Fair Value
$30.95
-64.4% vs $87.04
Sensitivity — fair value by discount rate × terminal growth
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 12.1%/yr FCF growth and 10-year horizon fixed. Green = above today's $87.04; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 8.1% | $44.12 | $47.65 | $51.82 | $56.80 | $62.87 |
| 9.1% | $34.53 | $36.96 | $39.76 | $43.01 | $46.85 |
| 10.1% | $27.25 | $28.99 | $30.95 | $33.18 | $35.76 |
| 11.1% | $21.55 | $22.83 | $24.25 | $25.84 | $27.65 |
| 12.1% | $16.98 | $17.94 | $19.00 | $20.17 | $21.48 |
About Canadian Pacific Kansas City Ltd.
Specializing in railway freight transportation, Canadian Pacific Kansas City Ltd. operates an extensive rail network connecting Canada, the United States, and Mexico. The company, headquartered in Calgary, Canada, began its operations on June 22, 2001.
- Sector
- Industrials
- Industry
- Railroads
- CEO
- Keith E. Creel