BMO Capital analyst Fadi Chamoun maintained a Buy rating on Canadian National Railway yesterday and set a price target of C$163.00.
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Fadi Chamoun has given his Buy rating due to a combination of factors that suggest a favorable risk/reward scenario for Canadian National Railway (CNR). Despite the lowered guidance for fiscal 2025, which reflects challenges such as soft industrial demand, trade uncertainties, and foreign exchange headwinds, the current valuation level presents an opportunity. Chamoun anticipates a recovery in the freight market by 2026/2027, which supports the Outperform rating.
Chamoun acknowledges that while the Q2/F25 results were largely in line with expectations, the company faced macroeconomic headwinds that impacted industrial demand and resulted in a slight decrease in revenue ton-miles. However, CNR’s operational efficiency, as evidenced by the improvement in operating ratio and better-than-expected adjusted EPS, highlights the company’s resilience. The decision to maintain a Buy rating is also influenced by CNR’s strong franchise in the rail industry and the potential for improved operating efficiency and return on invested capital in the future.
In another report released today, Raymond James also reiterated a Buy rating on the stock with a C$162.00 price target.
CNI’s price has also changed slightly for the past six months – from $104.430 to $100.370, which is a -3.89% drop .