Canadian National Railway (CNR) AI Stock Analysis

• Market Cap: $80.50B
• Dividend Yield: 2.62%
• Average Volume (3M): 1.09M
• Price to Earnings (P/E): 17.3
• Beta (1Y): 0.63
• Revenue Growth: 0.23%
• EPS Growth: -13.22%
• Country: CA
• Employees: 24,911
• Sector: Industrials
• Sector Strength: 72
• Industry: Railroads
• EPS (TTM): 2.08
• Shares Outstanding: 615,500,000
• 10 Day Avg. Volume: 1,369,642
• 30 Day Avg. Volume: 1,088,127
• PEG Ratio: 2.25
• Price to Book (P/B): 3.92
• Price to Sales (P/S): 4.89
• P/FCF Ratio: 24.94
• Enterprise Value/Market Cap: 1.27
• Enterprise Value/Revenue: 5.92
• Enterprise Value/Gross Profit: 13.20
• Enterprise Value/Ebitda: 11.25
• 1Y Price Target: $152.03
• Price Target Upside: 15.49% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 18
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 72 Outperform
• Price Target: C$145.00 ▲(10.15% Upside)

Score is driven primarily by strong underlying profitability and solid operating cash generation, tempered by higher leverage and weaker free-cash-flow trends. Technicals are a notable drag given the stock trading below key moving averages with negative momentum indicators, while valuation and a generally positive earnings-call outlook (cost/capex discipline and EPS guidance) provide support.

Positive Factors

Extensive rail network

CN's ~31,000-route-mile North American network provides a durable competitive moat: fixed-cost scale, dense routing, and broad market access across intermodal, grain, automotive and energy sectors. This asset base fosters long-term customer relationships, pricing power and high barriers to entry.

High operating profitability

Consistently strong operating (~41%) and net (~27%) margins reflect structural efficiency in rail operations and pricing strength with shippers. Durable margins support sustained ROE, internal reinvestment, and the capacity to fund dividends and buybacks even through moderate volume cycles.

Reliable operating cash flow

Stable annual operating cash generation that comfortably covers net income provides long-term financial resilience. Reliable OCF funds necessary capex, dividends and share repurchases, smoothing investment across cycles and helping maintain service and network reliability without excessive equity issuance.

Negative Factors

Rising leverage

Material increase in leverage reduces financial flexibility and heightens sensitivity to economic downturns and interest-rate moves. Higher debt loads can limit capacity for accelerated buybacks or opportunistic investments and increase restructuring risk if volumes or cash flow weaken.

Weak free cash flow conversion

Sub‑par FCF conversion and negative recent FCF growth reflect heavier capital intensity and working-capital pressure. Persistently lower free cash constrains discretionary capital allocation for debt reduction or increased shareholder returns and may force trade-offs between growth and payout priorities.

Worsening safety metrics

Rising injury and accident ratios increase long-term operational and regulatory risk. Sustained deterioration could raise insurance, compliance and labor costs, invite stricter oversight or penalties, and harm reputation with shippers, all of which can elevate operating costs and impair service reliability.

Canadian National Railway Business Overview & Revenue Model

Company Description

Canadian National Railway Company, together with its subsidiaries, engages in the rail and related transportation business. The company's portfolio of goods includes petroleum and chemicals, grain and fertilizers, coal, metals and minerals, forest products, intermodal, and automotive products serving exporters, importers, retailers, farmers, and manufacturers. It operates a network of 19,500 route miles of track spanning Canada and the United States. The company also provides vessels and docks, transloading and distribution, automotive logistics, and freight forwarding and transportation management services. Canadian National Railway Company was incorporated in 1919 and is headquartered in Montreal, Canada.

How the Company Makes Money

CNR generates revenue primarily through the transportation of freight across its extensive railway network. The company's revenue model is based on charging customers for the shipment of goods, which includes various freight categories such as intermodal containers, bulk commodities, and finished vehicles. Key revenue streams include charges for long-haul transportation, terminal services, and logistics solutions. Additionally, CNR benefits from long-term contracts with major shippers in sectors like agriculture and mining, which provide a stable income base. Strategic partnerships with logistics companies enhance its service offerings, allowing CNR to capture a broader market share and improve operational efficiency.

Canadian National Railway Financial Statement Overview

Summary

Strong profitability and earnings quality supported by high operating and net margins, plus solid operating cash flow that consistently covers net income. Offsets include a rising leverage profile (debt-to-equity ~1.01 in 2024–2025) and weaker free-cash-flow conversion with negative recent FCF growth.

Income Statement

Canadian National Railway shows consistently strong profitability, with high operating and net margins across the period (2025 net margin ~27% and operating margin ~41%), supporting solid earnings quality for a railroad. Revenue has grown meaningfully since 2020, but recent top-line momentum is modest (2024 ~+1% and 2025 shows a sharp jump vs. 2024 per the provided data). A key watch-out is volatility in gross margin (notably lower in 2023 and 2025 versus 2024), suggesting cost or pricing swings that could pressure profitability if sustained.

Balance Sheet

The balance sheet is supported by strong returns on shareholder capital (return on equity generally ~18%–28% over 2020–2025), indicating efficient profit generation. However, leverage has increased over time: debt-to-equity moved from ~0.56 (2021) to ~1.01 (2024–2025), with total debt rising materially, reducing financial flexibility versus earlier years. Overall asset growth is steady, but the higher debt load makes the company more sensitive to downturns and higher interest costs.

Cash Flow

Operating cash generation is consistently solid (roughly $6.2B–$7.0B annually), and operating cash flow has comfortably covered net income each year (coverage above 1.3x). The weaker area is free cash flow: free cash flow remains positive but runs at roughly half of net income (~0.47–0.59x), and growth in free cash flow has been negative in most recent years (including 2024 and 2025), pointing to heavier investment needs and/or working-capital pressure that can limit cash available for buybacks, dividends, or debt reduction.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	17.30B	17.05B	16.83B	17.11B	14.48B
Gross Profit	7.76B	9.31B	9.45B	9.62B	8.11B
EBITDA	9.12B	8.67B	8.89B	9.07B	7.61B
Net Income	4.72B	4.45B	5.63B	5.12B	4.90B
Balance Sheet
Total Assets	58.55B	57.07B	52.67B	50.66B	48.54B
Cash, Cash Equivalents and Short-Term Investments	363.00M	389.00M	475.00M	328.00M	838.00M
Total Debt	21.84B	21.37B	18.89B	15.89B	12.91B
Total Liabilities	36.99B	36.02B	32.55B	29.28B	25.79B
Stockholders Equity	21.57B	21.05B	20.12B	21.38B	22.74B
Cash Flow
Free Cash Flow	3.39B	3.15B	3.78B	3.92B	4.08B
Operating Cash Flow	7.05B	6.70B	6.96B	6.67B	6.97B
Investing Cash Flow	-3.71B	-3.61B	-3.47B	-2.51B	-2.87B
Financing Cash Flow	-3.37B	-3.62B	-3.41B	-4.67B	-3.86B

Canadian National Railway Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 131.64
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CNR, the sentiment is Negative. The current price of 131.64 is below the 20-day moving average (MA) of 136.25, below the 50-day MA of 135.01, and below the 200-day MA of 134.54, indicating a bearish trend. The MACD of -0.65 indicates Positive momentum. The RSI at 39.44 is Neutral, neither overbought nor oversold. The STOCH value of 23.30 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:CNR.

Canadian National Railway Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FTT	78 Outperform	C$11.46B	22.08	19.66%	1.58%	1.32%	24.27%
CNR	72 Outperform	$80.50B	17.28	22.24%	2.62%	0.23%	-13.22%
WJX	69 Neutral	C$625.98M	13.46	8.84%	5.09%	3.71%	-12.70%
CP	68 Neutral	C$92.43B	22.75	8.88%	0.82%	4.02%	21.39%
TFII	67 Neutral	C$12.64B	28.53	11.98%	1.75%	-0.25%	-28.71%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
GDI	61 Neutral	C$855.34M	20.27	8.55%	―	-2.83%	179.03%