DCF Tool

CP

Canadian Pacific Railway Ltd – Line-Haul Railroads
Canadian Pacific is a transcontinental railway in Canada and the United States with direct links to major ports on the west and east coasts. CP provides North American customers a competitive rail service with access to key markets in every corner of the globe. CP is growing with its customers, offering a suite of freight transportation services, logistics solutions and supply chain expertise.
Analysis Results
Intrinsic Value $44.03
Latest Price $81.52
Relative Value 85% overvalued
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Cash Flow (Billions)
Analysis Parameters
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Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 10.9%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 6.8%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 10.9%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (billion) Present value (billion)
2022 1.52 1.42
2023 1.68 1.48
2024 1.87 1.53
2025 2.07 1.59
2026 2.3 1.66
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 49.2 billion. This corresponds to a present value of 33.3 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 7.68 billion. Adding in the terminal value gives a total present value of 40.9 billion.

There are presently 930.0 million outstanding shares, so the intrinsic value per share is 44.03.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 1,061,965,531
Current Cash 54,197,945
Current Liabilities 2,481,323,309
Current Debt 1,217,490,069
Non-Cash Working Capital (NCWC) -256,065,653
Change in NCWC -26,128,819
EBIT 2,407,488,428
Tax Provision 603,246,692
Depreciation and Amortization 637,022,223
Capital Expenditure -1,203,351,475
Unlevered Free Cash Flow 1,304,270,381
Current Assets 1,036,677,671
Current Cash 115,360,800
Current Liabilities 2,081,987,784
Current Debt 930,734,079
Non-Cash Working Capital (NCWC) -229,936,834
Change in NCWC 242,196,203
EBIT 2,590,517,028
Tax Provision 594,853,652
Depreciation and Amortization 611,333,767
Capital Expenditure -1,311,346,244
Unlevered Free Cash Flow 1,519,455,311
Current Assets 927,404,180
Current Cash 101,937,814
Current Liabilities 1,756,702,794
Current Debt 459,103,391
Non-Cash Working Capital (NCWC) -472,133,037
Change in NCWC -183,824,921
EBIT 2,378,293,530
Tax Provision 541,113,513
Depreciation and Amortization 541,113,513
Capital Expenditure -1,262,342,714
Unlevered Free Cash Flow 939,521,915
Current Assets 819,440,623
Current Cash 44,750,114
Current Liabilities 1,434,204,493
Current Debt 371,205,868
Non-Cash Working Capital (NCWC) -288,308,115
Change in NCWC -47,967,488
EBIT 2,076,845,483
Tax Provision 467,308,574
Depreciation and Amortization 510,591,471
Capital Expenditure -1,137,826,685
Unlevered Free Cash Flow 890,456,315
Current Assets 1,013,887,282
Current Cash 268,990,503
Current Liabilities 1,578,926,506
Current Debt 593,689,099
Non-Cash Working Capital (NCWC) -240,340,627
Change in NCWC 113,522,172
EBIT 2,216,386,249
Tax Provision 74,012,179
Depreciation and Amortization 526,043,558
Capital Expenditure -1,066,412,055
Unlevered Free Cash Flow 1,707,024,344
Current Assets 748,527,390
Current Cash 121,663,520
Current Liabilities 999,272,938
Current Debt 18,546,268
Non-Cash Working Capital (NCWC) -353,862,800
Change in NCWC 28,306,949
EBIT 1,813,825,044
Tax Provision 410,243,455
Depreciation and Amortization 474,784,469
Capital Expenditure -876,867,567
Unlevered Free Cash Flow 973,949,802
Current Assets 1,108,292,275
Current Cash 468,698,750
Current Liabilities 1,043,395,525
Current Debt 21,632,250
Non-Cash Working Capital (NCWC) -382,169,750
Change in NCWC -139,671,746
EBIT 1,889,216,500
Tax Provision 437,692,525
Depreciation and Amortization 429,039,625
Capital Expenditure -1,097,476,150
Unlevered Free Cash Flow 495,730,783

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