EPS was 93c vs 94c estimates. Revenue was $3.52B vs $3.53B expected. Though challenging weather in 1Q drove Canadian Pacific Kansas City's (CPKC) earnings slightly below consensus, it wasn't all bad news, with the rail seeing 1% revenue-ton mile growth and posting double-digit improvements in key service metrics. Management remains confident in its ability to reach 2024 guidance and longer-term outlook, which should be achievable assuming economic conditions don't deteriorate significantly. Reaching double-digit adjusted EPS growth this year will be dependent on CP averting a labor strike with the Teamsters Canada Rail Conference (TCRC). On its earnings call, management noted the longer-term growth opportunity from its multiyear partnership with CSX and Schneider, pending STB approval, which could help facilitate traffic on its US-Mexico border. It is a good company but is tied to the economy. We would be comfortable buying if an investor has a long term holding period in mind.
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