Stock market today: S&P 500 climbs as health care, tech gain; Nvidia earnings loom
Investing.com - Evercore has expressed a preference for Canadian Pacific Kansas City (NYSE:CP) stock, a $68.79 billion market cap rail giant with a perfect Piotroski Score of 9 according to InvestingPro, as U.S. rail companies announce new intermodal services and face merger-related uncertainties.
CSX Corporation (NASDAQ:CSX) and BNSF Railway recently announced new intermodal services creating transcontinental shipment opportunities, including routes between Southern California and East Coast destinations, Phoenix to Atlanta, and connecting northeastern ports with midwestern hubs. Canadian Pacific Kansas City, with its impressive 52.51% gross profit margin, stands well-positioned in this competitive landscape.
The announcement triggered mixed market reactions, with CSX shares falling approximately 3.5%, while Canadian rails gained 2-3%, according to Evercore’s analysis. The firm characterized these new services as a strategic collaboration competing with truckload carriers and potentially responding to the Union Pacific-Norfolk Southern merger announcement.
Evercore maintains that these service collaborations don’t necessarily replace potential mergers, suggesting they could even serve as precursors to deeper collaborations between the railroads. The firm had previously labeled U.S. Class I rails as "effectively dead money into 2026" due to regulatory uncertainties.
While Evercore maintains an Outperform rating on CSX with a $39 price target, it prefers Canadian Pacific Kansas City as "a cleaner story with little M&A distraction, a better medium-term EPS growth algorithm, and now a more attractive valuation point" amid ongoing rail industry developments.
In other recent news, Canadian Pacific Kansas City reported its second-quarter earnings for 2025, which slightly missed analyst expectations. The company posted an earnings per share (EPS) of $1.12, just below the anticipated $1.13. Revenue for the quarter came in at $3.7 billion, falling short of the expected $3.8 billion. Stephens, an analyst firm, responded by raising its price target for Canadian Pacific Kansas City to $97 from $95, while maintaining an Overweight rating on the stock. This adjustment follows the company’s performance, which showed lower revenue per carload and a slightly higher operating ratio, although it was partially offset by higher below-the-line items. These developments highlight the ongoing analysis and adjustments by financial firms in response to Canadian Pacific Kansas City’s recent financial performance.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.