Canadian National Railway (CNR) AI Stock Analysis

• Market Cap: $88.53B
• Dividend Yield: 2.47%
• Average Volume (3M): 1.46M
• Price to Earnings (P/E): 19.8
• Beta (1Y): 0.75
• Revenue Growth: 2.60%
• EPS Growth: -15.63%
• Country: CA
• Employees: 24,911
• Sector: Industrials
• Sector Strength: 85
• Industry: Railroads
• EPS (TTM): 1.85
• Shares Outstanding: 627,500,000
• 10 Day Avg. Volume: 1,806,531
• 30 Day Avg. Volume: 1,462,012
• PEG Ratio: -3.16
• Price to Book (P/B): 4.06
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 26.98
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $163.41
• Price Target Upside: 14.88% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 19

• Rating: 78 Outperform
• Price Target: C$163.00 ▲(14.60%Upside)

Canadian National Railway receives a solid overall score of 78, driven by strong financial performance and a positive earnings call that highlighted operational improvements and growth prospects. Technical analysis provides a neutral outlook, with valuation indicating fair pricing. The company's ability to navigate macroeconomic challenges and leverage strategic strengths supports a favorable investment view.

Positive Factors

Financial Performance

Canadian National Railway reported a better-than-expected 1Q EPS of C$1.85, driven by a top-line beat with revenues exceeding assumptions.

Growth Opportunities

Development projects in Prince Rupert have the potential to support strong double-digit growth in volumes through this gateway for the coming several years.

Valuation

Analysts believe that at this modest level of CN Rail valuation, the risk/reward is favourable.

Negative Factors

Foreign Exchange

Foreign exchange will be a modest headwind, as the company originally modeled 0.70 CAD/USD, vs. 0.73 today.

Operating Expenses

Operating expenses exceeded estimates due to higher-than-expected fuel and equipment rents.

Short-term Performance

Increased blank sailings are likely to cause a pullback in 2Q performance.

Canadian National Railway Business Overview & Revenue Model

Company Description

Canadian National Railway (CNR) is a prominent North American transportation and logistics company headquartered in Montreal, Canada. As one of the largest rail networks on the continent, CNR operates approximately 20,000 route miles across Canada and the United States. The company provides integrated transportation services that include rail, intermodal, trucking, freight forwarding, warehousing, and distribution. CNR serves a diverse range of industries including petroleum and chemicals, metals and mining, forest products, grain and fertilizers, coal, and automotive products.

How the Company Makes Money

Canadian National Railway generates revenue primarily through its extensive freight transportation services. The company's key revenue streams include the transportation of bulk commodities such as grain, oil, and minerals, as well as the movement of consumer goods and automotive products. CNR also earns money from its intermodal services, which combine rail and truck transportation to offer flexible shipping solutions. Additionally, the company benefits from long-term contractual agreements with major customers and strategic partnerships with other transportation providers that enhance its service offerings. Ancillary services like warehousing, distribution, and logistics consulting further contribute to CNR's earnings.

Canadian National Railway Financial Statement Overview

Summary

Canadian National Railway demonstrates strong financial health with robust profitability, efficient operations, and solid cash flow generation. The minor fluctuations in profitability do not overshadow the stable financial position and moderate leverage. Consistent revenue growth and effective capital utilization underscore its resilience and capability to sustain future growth.

Income Statement

The company exhibits strong profitability with a consistent gross profit margin around 41% and a net profit margin of approximately 26% in TTM (Trailing-Twelve-Months). Revenue growth is stable with a 1% increase in TTM compared to the previous annual period. EBIT and EBITDA margins are robust, reflecting efficient operations. However, recent net income has shown a slight decline, indicating potential cost pressures.

Balance Sheet

The balance sheet reveals moderate leverage with a debt-to-equity ratio of about 0.98. The return on equity is strong at around 20.8% in TTM, reflecting effective use of equity capital. However, the equity ratio sits at approximately 37.7%, suggesting a balanced but slightly leveraged capital structure compared to total assets.

Cash Flow

Cash flow metrics are solid, with a positive free cash flow growth rate of 3.3% in TTM. Operating cash flow to net income ratio is healthy at around 1.5, indicating good cash conversion efficiency. The free cash flow to net income ratio is also positive, suggesting strong cash flow relative to net earnings, supporting future investments and debt repayments.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
17.20B	17.05B	16.83B	17.11B	14.48B	13.82B
	Gross Profit
7.14B	6.97B	7.15B	7.40B	6.07B	5.77B
	EBIT
6.39B	6.25B	6.60B	6.84B	5.62B	4.78B
	EBITDA
8.81B	8.63B	9.03B	9.07B	7.61B	7.65B
	Net Income Common Stockholders
4.51B	4.45B	5.63B	5.12B	4.90B	3.54B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
232.00M	389.00M	475.00M	328.00M	838.00M	569.00M
	Total Assets
57.40B	57.07B	52.67B	50.66B	48.54B	44.80B
	Total Debt
21.13B	21.37B	18.89B	15.77B	12.81B	13.22B
	Net Debt
20.90B	20.98B	18.41B	15.44B	11.97B	12.65B
	Total Liabilities
35.78B	36.02B	32.55B	29.28B	25.79B	25.15B
	Stockholders Equity
21.62B	21.05B	20.12B	21.38B	22.74B	19.65B
Cash Flow		Free Cash Flow
3.25B	3.15B	3.78B	3.92B	4.08B	3.30B
	Operating Cash Flow
6.75B	6.70B	6.96B	6.67B	6.97B	6.17B
	Investing Cash Flow
-3.56B	-3.61B	-3.47B	-2.51B	-2.87B	-2.95B
	Financing Cash Flow
-3.81B	-3.62B	-3.41B	-4.67B	-3.86B	-2.71B

Canadian National Railway Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 142.24
• 50DMA: Positive
• 100DMA: Positive
• 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 142.24 is below the 20-day moving average (MA) of 144.00, above the 50-day MA of 140.10, and below the 200-day MA of 146.21, indicating a neutral trend. The MACD of 0.29 indicates Positive momentum. The RSI at 48.46 is Neutral, neither overbought nor oversold. The STOCH value of 24.75 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
CNR	78 Outperform	$88.53B	19.76	21.81%	2.47%	2.60%	-15.63%
CJT	76 Outperform	$1.45B	11.80	15.65%	1.44%	16.28%	239.02%
CP	75 Outperform	$103.17B	26.90	8.50%	0.65%	7.33%	-1.42%
AC	73 Outperform	$6.53B	3.94	132.28%	―	0.24%	-23.10%
Sector *	66 Neutral	$4.50B	12.26	5.40%	3.65%	4.17%	-12.02%
TFII	63 Neutral	$10.40B	19.63	14.78%	2.00%	16.00%	-17.63%
GFL	63 Neutral	C$24.68B	9.57	-10.02%	0.12%	1.37%	-9742.41%

Canadian National Railway Corporate Events

CN Launches C$1 Billion Debt Offering for Strategic Growth

Canadian National Railway announced a C$1 billion public debt offering, consisting of C$500 million 3.500% Notes due 2030 and C$500 million 4.200% Notes due 2035. The proceeds from this offering are intended for general corporate purposes, including debt refinancing, share repurchases, and potential acquisitions, which could impact the company’s financial strategy and market positioning.

The most recent analyst rating on (TSE:CNR) stock is a Buy with a C$168.00 price target. To see the full list of analyst forecasts on Canadian National Railway stock, see the TSE:CNR Stock Forecast page.