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Canadian Pacific Kansas City (CP) Soars 9.0%: Is Further Upside Left in the Stock?

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Canadian Pacific Kansas City (CP - Free Report) shares soared 9% in the last trading session to close at $73.18. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 8.1% loss over the past four weeks.

The stock gained following President Donald Trump's announcement that he would pause the "reciprocal" import taxes for 90 days.

This railroad is expected to post quarterly earnings of $0.75 per share in its upcoming report, which represents a year-over-year change of +8.7%. Revenues are expected to be $2.62 billion, up 0.5% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Canadian Pacific Kansas City, the consensus EPS estimate for the quarter has been revised marginally lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on CP going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Canadian Pacific Kansas City is a member of the Zacks Transportation - Rail industry. One other stock in the same industry, Norfolk Southern (NSC - Free Report) , finished the last trading session 7.6% higher at $222.02. NSC has returned -11.4% over the past month.

Norfolk Southern's consensus EPS estimate for the upcoming report has changed -1.2% over the past month to $2.83. Compared to the company's year-ago EPS, this represents a change of +13.7%. Norfolk Southern currently boasts a Zacks Rank of #3 (Hold).


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