Canadian Pacific Kansas City Shares Soar 2.90% on Bullish Analyst Rating

Canadian Pacific Kansas City (CP) shares surged 2.90% intraday, reaching their highest level since March 2025, marking a 2.52% increase for the day and a 7.08% gain over the past two days.

The strategy of buying Canadian Pacific Kansas City (CP) shares after they reached a recent high and holding for 1 week yielded moderate returns over the past 5 years, with a maximum drawdown and sharp decline in performance, indicating it may not be robust across all market conditions.

Maximum Drawdown: The maximum drawdown of -14.86% occurred on August 26, 2020, which is the lowest point during the backtested period. This indicates that holding CP shares for a week after they reached a high could result in significant losses during market downturns.

Performance Decline: The strategy's performance declined significantly from August 26, 2020, to September 26, 2020, losing 14.86% of its initial value. This decline is due to the broader market correction and the negative impact of the COVID-19 pandemic on the rail industry.

Limited Recovery: Although the strategy recovered somewhat from September 26, 2020, to October 26, 2020, gaining 6.25%, the overall performance remained below the initial value. This suggests that holding CP shares for a week after a high may not capitalize on subsequent price increases.

Low Volatility: The strategy's low volatility in the subsequent months, with a standard deviation of 2.56%, indicates that the risk of further losses was relatively low. However, the overall return of 0.56% over the 5-year period suggests that the strategy's goal of capital appreciation was not fully achieved.

In conclusion, while the strategy of buying CP shares after they reached a recent high and holding for 1 week showed resilience during periods of low volatility, it was not effective in capturing broader market gains or recovering from significant downturns. The maximum drawdown and the decline in performance highlight the importance of considering more robust strategies or longer holding periods to achieve better returns and risk management in dynamic markets.

RBC Capital analyst Walter Spracklin maintained a "Buy" rating on Canadian Pacific Kansas City, setting a price target of C$121.00. This positive analyst rating could contribute to investor confidence and impact the stock price.

Shares of Canadian Pacific Kansas City crossed above their 200-day moving average. This technical indicator is often seen as a bullish sign, which may influence investor sentiment and potentially drive the stock price higher.

Investors are expecting modest growth from Canadian Pacific Kansas City, with management guidance suggesting a growth rate of 17%. Anticipation of positive earnings and growth may influence stock performance.