(The following story by Leonard Zehr appeared on the Globe and Mail website on October 30.)
TORONTO — Profit growth in the fourth quarter at Canadian Pacific Railway Ltd. could slow to 6 per cent, from 12.2 per cent year-to-date, writes UBS’ Fadi Chamoun, pegging the bottom line at $1.22 a share, compared with consensus of $1.28.
While CPR management expects loonie headwinds to intensify and growth in shipping volume to moderate during the next two quarters, it is sticking with previous per-share guidance of $4.30-to-$4.45 for 2007 overall, but suggesting profit will be at the lower end of the range.
Even with slowing volumes and foreign exchange land slides, Mr. Chamoun predicts “strong pricing and ongoing productivity” should support 10 per cent-plus growth in the bottom line next year to $4.80 a share, modestly below consensus of $4.94.
His $80 price target stacks up against a closing price of $67.25 on the TSX Monday.