Canadian National Railway: Strong Growth Potential Driven by Prince Rupert Gateway and Operational Improvements

In a report released today, Fadi Chamoun from BMO Capital maintained a Buy rating on Canadian National Railway (CNI – Research Report), with a price target of C$168.00.

Fadi Chamoun has given his Buy rating due to a combination of factors that highlight Canadian National Railway’s growth potential and operational improvements. The Prince Rupert gateway is a significant contributor, with development projects expected to drive strong volume growth in the coming years. This gateway alone accounts for a notable portion of CNR’s carloads and is projected to experience a 10% compound annual growth rate from 2024 to 2027, supporting durable growth beyond this period.
Additionally, on a system-wide basis, CNR is anticipated to achieve a 2-3% volume growth trajectory, even in a low GDP environment. This growth, coupled with annual pricing increases, operational leverage, and share repurchases, is expected to result in high-single to low-double-digit EPS growth. The current valuation of CN Rail presents a favorable risk/reward scenario, and the company’s strong operational performance further supports this positive outlook.

In another report released today, RBC Capital also maintained a Buy rating on the stock with a C$163.00 price target.