Canadian Pacific Changes Focus

The appointment of Kathryn McQuade as Canadian Pacific Railway Co.'s (CP) new CFO reflects a change in focus at Canada's second largest railway, says Blackmont analyst Avi Dalfen. 

CP said Thursday that Mike Lambert, executive vice president and CFO, has been replaced by Ms. McQuade effective immediately. The stock fell 4% following the announcement and continued to decline in Friday morning trading as last week's ongoing market sell off continued.

In a note to clients, Mr. Dalfen said:

The change is related to a different focus by CP management as Mr. Lambert was hired from outside the industry, and had a history of managing rapid growth, when CP's focus was on growth,

Ms. McQuade, who remains the No. 2 ranked person in CP management, and has extensive financial experience with another railroad, is becoming CFO while CP's focus is on improving efficiencies.

Mr. Dalfen also told clients that he reduced his target price on CP shares from C$69 to C$68 to reflect "a compression in valuation multiples." He maintained his "hold" recommendation.

Comments

[jimsep:]

Reduced his target price from 69 to 68?

Give me a break!

2008 Sep 09 02:30 PM