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Canadian Pacific (CP) to Pause Operations if Union Talks Fail
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Canadian Pacific Railway Limited (CP - Free Report) issued a 72-hour notice to the Teamsters Canada Rail Conference (TCRC)-Train & Engine of its plan to lock out employees on Mar 20, 2022, if there is no agreement with the union. TCRC represents about 3,000 locomotive engineers, conductors, train and yard workers across Canada. The labor disruption on materialization is likely to create more uncertainty in the fertilizer markets with farmers needing key nutrients to plant spring crops. The scenario would disrupt the movement of potash, grain and coal.
CP had tabled an offer to address a total of 26 outstanding issues, including key issues of wages, benefits and pensions through final and binding arbitration. However, it was rejected by the TCRC union. CP’s President and CEO, Keith Creel stated, “Delaying resolution would only make things worse. We take this action with a view to bringing this uncertainty to an end."
TCRC's proposal included an even more onerous pension demand. If accepted, the TCRC's latest position would be even more destabilizing to the pension plan for all of CP's unionized employees and not just the 10% who are TCRC members.
However, Canadian Pacific will continue to bargain with the TCRC union to achieve a negotiated settlement or enter binding arbitration.
Zacks Rank & Stocks to Consider
Canadian Pacific currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Transportation sector are Expeditors International of Washington, Inc. (EXPD - Free Report) , Old Dominion Freight Line, Inc. (ODFL - Free Report) and Triton International Limited .
Expeditors has an earnings surprise of 34.2%, having surpassed the Zacks Consensus Estimate in all of the past four quarters. Expeditors is being aided by the uptick in airfreight revenues. We are optimistic about the company’s buyout of Fleet Logistics’ Digital Platform. The acquisition has boosted Expeditors’ online LTL shipping platform, Koho. The move is in line with the company's focus on Digital Solutions.
The long-term expected EPS (three to five years) growth rate for Old Dominion is pegged at 16%. Old Dominion is benefiting from the strong performance of the LTL segment owing to improved freight conditions. In 2021, revenues from the LTL services segment increased 30.7% on a year-over-year basis.
Driven by the tailwinds, the stock has increased 40.6% in the past year. ODFL currently carries a Zacks Rank #2 (Buy).
The long-term expected EPS (three to five years) growth rate for Triton is pegged at 10%. Gradual increases in trade volumes and container demand bode well for the company. With easing coronavirus-led restrictions in the United States and Europe, the company saw a strong rebound in its business in the third, the fourth of 2020 as well as in each of the four quarters of 2021.
Driven by the tailwinds, the stock has increased 14.5% in the past year. TRTN currently carries a Zacks Rank #2.
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Canadian Pacific (CP) to Pause Operations if Union Talks Fail
Canadian Pacific Railway Limited (CP - Free Report) issued a 72-hour notice to the Teamsters Canada Rail Conference (TCRC)-Train & Engine of its plan to lock out employees on Mar 20, 2022, if there is no agreement with the union. TCRC represents about 3,000 locomotive engineers, conductors, train and yard workers across Canada. The labor disruption on materialization is likely to create more uncertainty in the fertilizer markets with farmers needing key nutrients to plant spring crops. The scenario would disrupt the movement of potash, grain and coal.
CP had tabled an offer to address a total of 26 outstanding issues, including key issues of wages, benefits and pensions through final and binding arbitration. However, it was rejected by the TCRC union. CP’s President and CEO, Keith Creel stated, “Delaying resolution would only make things worse. We take this action with a view to bringing this uncertainty to an end."
TCRC's proposal included an even more onerous pension demand. If accepted, the TCRC's latest position would be even more destabilizing to the pension plan for all of CP's unionized employees and not just the 10% who are TCRC members.
However, Canadian Pacific will continue to bargain with the TCRC union to achieve a negotiated settlement or enter binding arbitration.
Zacks Rank & Stocks to Consider
Canadian Pacific currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Transportation sector are Expeditors International of Washington, Inc. (EXPD - Free Report) , Old Dominion Freight Line, Inc. (ODFL - Free Report) and Triton International Limited .
Expeditors has an earnings surprise of 34.2%, having surpassed the Zacks Consensus Estimate in all of the past four quarters. Expeditors is being aided by the uptick in airfreight revenues. We are optimistic about the company’s buyout of Fleet Logistics’ Digital Platform. The acquisition has boosted Expeditors’ online LTL shipping platform, Koho. The move is in line with the company's focus on Digital Solutions.
EXPD currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The long-term expected EPS (three to five years) growth rate for Old Dominion is pegged at 16%. Old Dominion is benefiting from the strong performance of the LTL segment owing to improved freight conditions. In 2021, revenues from the LTL services segment increased 30.7% on a year-over-year basis.
Driven by the tailwinds, the stock has increased 40.6% in the past year. ODFL currently carries a Zacks Rank #2 (Buy).
The long-term expected EPS (three to five years) growth rate for Triton is pegged at 10%. Gradual increases in trade volumes and container demand bode well for the company. With easing coronavirus-led restrictions in the United States and Europe, the company saw a strong rebound in its business in the third, the fourth of 2020 as well as in each of the four quarters of 2021.
Driven by the tailwinds, the stock has increased 14.5% in the past year. TRTN currently carries a Zacks Rank #2.