(The following story by Scott Deveau appeared on the National Post website on August 18, 2009.)
OTTAWA — Canadian Pacific Railway Ltd. was downgraded Tuesday to a “sector perform” by David Newman, National Bank Financial analyst, after a recent run-up in its stock price.
Shares in the country’s No. 2 railway have climbed 19% since CP reported its better-than-expected second-quarter result at the end of July.
In addition, the railway’s volumes appear to have bottomed, and may even be improving in recent weeks, only down 19.4% to date during the third quarter compared to a 24.3% drop experienced during the second quarter, Mr. Newman noted.
Nevertheless, he said he was maintaining his $50 price target, despite the stock trading at $51.48 as of 1:50 p.m. on the Toronto Stock Exchange Tuesday.
“We are content to remain on the sidelines for the time being as the shares consolidate recent gains,” Mr. Newman said in a note to clients.
He downgraded the stock to a “sector perform” from an “outperform” accordingly.