Canadian Pacific Kansas City Limited

AI-generated fair value estimate for this company.

Method: 10-year two-stage FCFE DCF converted from CAD at 1 USD = 1.4254 CAD: C$2.29B normalized free cash flow base (average of FY2025 C$2.17B and TTM C$2.40B) equal to US$1.60B; 7% annual FCF growth for years 1-5 reflecting ramping cross-border Canada-US-Mexico network synergies from the Kansas City Southern merger; 4% for years 6-10; 7.5% discount rate; 2.5% terminal growth; US$17.39B net debt (C$24.78B debt less C$0.37B cash, converted); 879.08M shares outstanding.

Reasoning: CPKC's unique single-line network connecting Canada, the US, and Mexico is still ramping post-merger synergies, supporting above-peer growth assumptions for the first five years before converging to a railroad-industry-typical long-run rate; FCF is currently suppressed by integration and network-investment capex, so the DCF uses a normalized base.