Analysts at Deutsche Bank downgraded Canadian Pacific Railway Limited (NYSE:CP) to hold from buy predominantly to reflect the significant additional debt (the company is in the process of raising over C$10 billion in new debt) and new equity (the company will issue 262 new shares to pay for its KSU acquisition), as well as a bit too optimistic 2023 EPS expectations.

The analysts believe the near-term risks associated with higher debt and equity and optimistic EPS expectations have the potential to more than offset the long-term benefits of the KSU acquisition over the course of 2022.