NEW YORK (TheStreet) -- Shares of Canadian Pacific Railway  (CP - Get Report) are down 3.21% to $126.29 in early-market trading on Tuesday after Norfolk Southern (NSC) rejected the latest, revised offer from its rival.

Calgary-based Canadian Pacific revised its offer to $32.86 in cash and 0.451 of a share per Norfolk Southern share from its previous offer of $46.72 in cash and 0.348 of its own shares.

"Canadian Pacific's revised, reduced proposal is not only less than what the Norfolk Southern board has already found to be grossly inadequate, it is even more uncertain and risky given the decrease in the cash consideration," said Norfolk Southern CEO James Squires.

"In addition to being grossly inadequate, the proposal is based on a voting trust structure that we reviewed and do not believe would be approved by the STB. Yesterday we released a white paper by two former STB chairmen who believe that the STB would not approve any voting trust structure because there is no basis to determine that it would be in the public interest," Squires said.

Norfolk Southern shares are down 4.53% to $87.37 in trading today.

TheStreet Ratings team rates CANADIAN PACIFIC RAILWAY LTD as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

We rate CANADIAN PACIFIC RAILWAY LTD (CP) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, good cash flow from operations and expanding profit margins. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 9.3%. Since the same quarter one year prior, revenues slightly increased by 2.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Road & Rail industry and the overall market, CANADIAN PACIFIC RAILWAY LTD's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has increased to $696.00 million or 30.33% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -5.04%.
  • 48.80% is the gross profit margin for CANADIAN PACIFIC RAILWAY LTD which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 18.89% trails the industry average.
  • CANADIAN PACIFIC RAILWAY LTD's earnings per share declined by 11.7% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CANADIAN PACIFIC RAILWAY LTD increased its bottom line by earning $8.49 versus $4.98 in the prior year. This year, the market expects an improvement in earnings ($10.25 versus $8.49).
  • You can view the full analysis from the report here: CP

Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.