Canadian Pacific Railway stock rises
NEW YORK (AP) — Canadian Pacific Railway's stock rose to an all-time high on Wednesday following the company's announcement that it will eliminate 4,500 positions, or about 23 percent of its workforce, by 2016.
THE SPARK: Canadian Pacific, which is Canada's second-biggest railway, said Tuesday that it expects 1,700 positions will be eliminated by the end of the year. The company has a total of 19,500 workers, which includes employees and contractors.
Canadian Pacific said the reductions will be achieved through job cuts, attrition and fewer contractors as part of its restructuring plan.
THE ANALYSIS: Citi Investment Research's Christian Wetherbee said in a client note that investors should be upbeat that the company's plan is being driven by the job eliminations and other actions, such as the closing of some train yards.
The analyst maintained a "Buy" rating.
Jeffrey Kauffman of Sterne, Agee & Leach said that the closure of some of the yards and some intermodal terminals should help to lower operating costs and improve transit times, which will then provide revenue opportunities.
The analyst reiterated a "Neutral" rating and $86 price target.
SHARE ACTION: Shares of Canadian Pacific Railway Ltd. gained $4.45, or 4.8 percent, to $98.07 in afternoon trading. The stock rose as high as $98.93 in earlier trading. That was its highest ever, according to data from FactSet.