Raymond James upgraded Canadian Pacific Railway Ltd to “outperform” from “market perform”, as the brokerage expects the company to gain partly from its diverse bulk franchise including coal, potash and grain, and exposure to emerging markets.

Carload volumes at Canada’s No. 2 carrier in the first quarter of the year were weak due to extreme winter conditions, lower thermal coal volumes and irregular grain harvest in the country, the brokerage said in a note.

The company also saw the unexpected retirement of its chief operating officer Ed Harris, the brokerage said.

However, Raymond James forecast volume issues to be temporary, and expects the company to “continue to glean further operating efficiencies” despite Harris’ departure, the note said.

The brokerage, which has a constructive view on the Canadian rail sector, also raised its price target on CP’s stock, which has shed about 3 percent of its value in the past three months, to C$74 from C$70. (Reuters)