Canadian National Railway Company (TSE:CNR)
NYSE:CNR
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Canadian National Railway
(NYSE:CNR)
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Rating:72Outperform
Price Target:
C$186.00
â–²(23.05% Upside)
Action:Reiterated
Date:05/05/26
The score is primarily driven by strong profitability and cash generation, supported by constructive earnings-call execution and capital returns. It is tempered by softer top-line trends and higher leverage, while technical signals are neutral-to-mixed and valuation appears reasonable rather than compelling.
Positive Factors
Free cash flow generation
Consistently strong free cash flow (Q1 ~$900M, +44% YoY) and FCF that generally exceeds net income gives CN durable internal funding. This supports capex for network upkeep, sizable buybacks and dividend returns without relying solely on external financing, sustaining shareholder returns and operational investment.
Negative Factors
Elevated leverage versus historical levels
Leverage near parity with equity represents a meaningful increase versus prior years and narrows financial flexibility. Higher net debt limits the company's ability to absorb shocks, constrains funding optionality for opportunistic investment, and makes sustained buybacks more trade‑off intensive versus balance‑sheet repair.
Read all positive and negative factors
Positive Factors
Negative Factors
Free cash flow generation
Consistently strong free cash flow (Q1 ~$900M, +44% YoY) and FCF that generally exceeds net income gives CN durable internal funding. This supports capex for network upkeep, sizable buybacks and dividend returns without relying solely on external financing, sustaining shareholder returns and operational investment.
Read all positive factors
Canadian National Railway (CNR) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$101.87B
Dividend Yield2.62%
Average Volume (3M)1.63M
Price to Earnings (P/E)21.8
Beta (1Y)0.79
Revenue Growth0.47%
EPS Growth6.34%
CountryCA
Employees24,911
SectorIndustrials
Sector Strength72
IndustryRailroads
Share Statistics
EPS (TTM)7.60
Shares Outstanding606,600,000
10 Day Avg. Volume1,923,987
30 Day Avg. Volume1,632,647
Financial Highlights & Ratios
PEG Ratio2.25
Price to Book (P/B)3.92
Price to Sales (P/S)4.89
P/FCF Ratio24.94
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$162.93Price Target Upside7.78% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering14
EPS Forecast (FY)7.84
Revenue Forecast (FY)C$17.97B
Canadian National Railway Business Overview & Revenue Model
Company Description
Canadian National Railway (CN), along with its affiliated companies, specializes in railroad operations and integrated transportation services. The company handles a wide variety of commodities, including energy products like petroleum and chemica...
How the Company Makes Money
CN primarily makes money by charging customers freight rates to transport goods over its rail network. Its core revenue stream is freight revenue generated from moving railcarload and intermodal shipments across a variety of commodity groups (e.g....
Canadian National Railway Earnings Call Summary
Earnings Call Date:Apr 29, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jul 24, 2026
Earnings Call Sentiment Positive
The call emphasized strong operational execution, meaningful productivity gains and robust free cash flow, with record grain volumes and multiple operating metrics improving materially. Commercial teams converted ~$100M in incremental revenue and fast‑track initiatives are delivering early savings. However, management called out safety setbacks, elevated incident-related costs, short-term commodity and tariff headwinds, and fuel/FX volatility that compressed adjusted EPS and margins. On balance the positive operational and cash-generation developments outweighed the transitory challenges, though management remains appropriately cautious given macro and commodity uncertainties.Positive Updates
Volume Growth and Record Grain Shipments
RTMs increased 3% year-over-year and carloads rose 2%; company set a new first-quarter record for grain movements with April tracking as another record month (7 of the last 8 months all-time records). Grain car cycle times improved 15% versus prior year.
Negative Updates
Safety Deterioration and Higher Incident Costs
Safety performance fell short in Q1 with accidents up year-over-year; incident-related costs were over $30 million higher, contributing to roughly $50 million of increased 'other expenses' in the quarter. Management flagged safety as the primary area of dissatisfaction.
Read all updates
Q1-2026 Updates
Positive
Negative
Volume Growth and Record Grain Shipments
RTMs increased 3% year-over-year and carloads rose 2%; company set a new first-quarter record for grain movements with April tracking as another record month (7 of the last 8 months all-time records). Grain car cycle times improved 15% versus prior year.
Read all positive updates
Company Guidance
CN maintained its directional 2026 guidance of flattish volumes with earnings expected to grow slightly faster than volumes, and reiterated a focus on free cash flow and returning capital to shareholders while keeping pricing discipline; management updated key assumptions including WTI now assumed roughly $80–$110/bbl and FX at C$0.73/USD, an effective tax rate of 25–26%, and a target leverage of ~2.7x through 2026 before returning to ~2.5x in 2027. In Q1 they reported diluted EPS $1.87 (adjusted $1.80; $1.83 FX‑adjusted), generated ~ $900M of free cash flow (up ≈$275M or 44% YoY), repurchased 6M shares for $870M, saw revenues down 1% (up 2% FX‑adjusted; up 3% adjusted for FX, fuel surcharge and Canadian carbon tax), RTMs +3%, carloads +2%, converted about $100M of incremental revenue from the sales pipeline, and noted fuel and FX were a combined ~$0.07 drag in the quarter (fuel ≈$0.04 and ~80 bps OR headwind in Q1; if sustained could be >200 bps OR headwind in Q2 but a potential ~+$0.15 EPS tailwind in H2).Canadian National Railway Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
70
Positive
Cash Flow
74
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 17.28B | 17.30B | 17.05B | 16.83B | 17.11B | 14.48B |
| Gross Profit | 7.24B | 7.76B | 9.31B | 9.45B | 9.62B | 8.11B |
| EBITDA | 8.92B | 9.12B | 8.67B | 8.89B | 9.07B | 7.61B |
| Net Income | 4.71B | 4.72B | 4.45B | 5.63B | 5.12B | 4.90B |
Balance Sheet | ||||||
| Total Assets | 59.46B | 58.55B | 57.07B | 52.67B | 50.66B | 48.54B |
| Cash, Cash Equivalents and Short-Term Investments | 586.00M | 363.00M | 389.00M | 475.00M | 328.00M | 838.00M |
| Total Debt | 22.52B | 21.84B | 21.37B | 18.89B | 15.89B | 12.91B |
| Total Liabilities | 38.01B | 36.99B | 36.02B | 32.55B | 29.28B | 25.79B |
| Stockholders Equity | 21.45B | 21.57B | 21.05B | 20.12B | 21.38B | 22.74B |
Cash Flow | ||||||
| Free Cash Flow | 3.57B | 3.39B | 3.15B | 3.78B | 3.92B | 4.08B |
| Operating Cash Flow | 7.15B | 7.05B | 6.70B | 6.96B | 6.67B | 6.97B |
| Investing Cash Flow | -3.54B | -3.71B | -3.61B | -3.47B | -2.51B | -2.87B |
| Financing Cash Flow | -3.27B | -3.37B | -3.62B | -3.41B | -4.67B | -3.86B |
Canadian National Railway Technical Analysis
Positive
151.16
Price Trends
153.73
Positive
147.59
Positive
139.65
Positive
Market Momentum
4.09
Negative
71.92
Negative
74.11
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CNR, the sentiment is Positive. The current price of 151.16 is below the 20-day moving average (MA) of 159.61, below the 50-day MA of 153.73, and above the 200-day MA of 139.65, indicating a bullish trend. The MACD of 4.09 indicates Negative momentum. The RSI at 71.92 is Negative, neither overbought nor oversold. The STOCH value of 74.11 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:CNR.
Canadian National Railway Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | C$101.87B | 21.82 | 21.93% | 2.62% | 0.47% | 6.34% | |
72 Outperform | C$111.31B | 25.33 | 8.85% | 0.82% | 1.10% | 8.73% | |
68 Neutral | C$13.37B | 19.84 | 24.23% | 1.58% | -6.98% | 11.17% | |
67 Neutral | C$647.57M | 10.49 | 11.63% | 5.09% | -3.59% | 50.73% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
58 Neutral | C$18.28B | 40.23 | 11.18% | 1.75% | -7.84% | -21.07% |
* Industrials Sector Average
TSE:CNR
Canadian National Railway
167.94
27.54
19.61%
TSE:CP
Canadian Pacific Kansas City
125.39
14.57
13.15%
TSE:TFII
TFI International
222.37
104.39
88.48%
TSE:FTT
Finning International
102.38
50.49
97.31%
TSE:WJX
Wajax Corporation
29.90
8.04
36.79%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.