Canadian Pacific sees full-year operating ratio in 'mid-sixties' for 2016 Financial expectations for the company's plan through to 2016 include: compound annual revenue growth of 4% - 7% off the 2012 base; a full-year operating ratio in the mid-sixties for 2016; cash flow before dividends of $900M-$1.4B in 2016; annual capital spending in the range of $1B-$1.1B over the period. Key Assumptions include: average fuel cost per gallon of $3.45 per U.S. gallon; Defined benefit pension expense of $140M-$150M through 2016; defined benefit pension contributions between $100M-$125M through 2015 increasing to $200M-$300M in 2016; a tax rate of 25%-27%; CP becomes fully cash taxable during the four-year period; Canadian to U.S. exchange rate at par.
Canadian Pacific upgraded to Buy from Neutral at Buckingham Buckingham upgraded Canadian Pacific to Buy based on continued visibility for near-term crude growth and the positive impact from a lower Canadian dollar that will offset weaker long-term crude by rail growth. Price target is $209.
Canadian Pacific downgraded to Neutral from Buy at Goldman Goldman Sachs downgraded Canadian Pacific Railway to Neutral saying uncertainty around lower oil prices should drive a reduced multiple for shares. Goldman cut its price target for the rail operator to $202 from $223, but points out the company's crude business has yet to be impacted from lower oil prices. CP shares closed Friday down $2.57 to $191.58.