Canadian National Railway (TSE:CNR)
TSX:CNR
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Canadian National Railway
(TSX:CNR)
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Rating:77Outperform
Price Target:
C$153.00
â–²(2.66% Upside)
Action:ReiteratedDate:03/02/26
The score is driven primarily by strong financial profitability and supportive trend/momentum signals. It is tempered by higher leverage and soft recent free-cash-flow growth, a valuation that is not cheap at ~20x earnings, and a cautious earnings outlook tied to flat volumes, tariff/trade uncertainty, and a planned near-term increase in leverage.
Positive Factors
High Profitability & Margins
Sustained high operating and net margins reflect structural pricing power, network efficiency, and cost discipline. Durable margins support reinvestment, dividends and buybacks across cycles, cushioning earnings against moderate volume swings and enabling consistent shareholder returns over 2–6 months.
Negative Factors
Rising Leverage
A materially higher debt load reduces balance-sheet flexibility and increases interest-rate sensitivity. Elevated leverage limits capacity to absorb cyclical volume shocks or to accelerate strategic investments without added financing risk, making capital allocation outcomes more contingent on near-term cash conversion.
Read all positive and negative factors
Positive Factors
Negative Factors
High Profitability & Margins
Sustained high operating and net margins reflect structural pricing power, network efficiency, and cost discipline. Durable margins support reinvestment, dividends and buybacks across cycles, cushioning earnings against moderate volume swings and enabling consistent shareholder returns over 2–6 months.
Read all positive factors
Canadian National Railway (CNR) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$91.12B
Dividend Yield2.62%
Average Volume (3M)2.16M
Price to Earnings (P/E)16.7
Beta (1Y)0.81
Revenue Growth0.23%
EPS Growth-13.22%
CountryCA
Employees24,911
SectorIndustrials
Sector Strength72
IndustryRailroads
Share Statistics
EPS (TTM)2.08
Shares Outstanding611,400,000
10 Day Avg. Volume1,549,339
30 Day Avg. Volume2,161,349
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$154.27Price Target Upside3.51% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering16
EPS Forecast (FY)7.88
Revenue Forecast (FY)C$17.78B
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...
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:Jan 30, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 29, 2026
Earnings Call Sentiment Positive
The call communicated disciplined execution and measurable operational and financial improvements (EPS growth, operating ratio gains, record free cash flow, operational productivity and commercial wins in Grain and Intermodal). However, the business faces meaningful headwinds from tariffs & trade uncertainty (~$350M revenue impact), adverse commodity mix (forest products, metals), legal provisions, FX sensitivity, and near-term volume comparables that make 2026 guidance cautious. Management underscores confidence in long-term leverage from productivity and capacity investments and is taking deliberate capital and balance sheet actions (CapEx reduction, targeted buybacks) to enhance shareholder returns while navigating the uncertain macro/trade backdrop.Positive Updates
Strong EPS and Earnings Performance
Q4 adjusted diluted EPS rose ~14% year-over-year; reported diluted EPS grew 12% in the quarter. Full-year adjusted diluted EPS was $7.63, up 7% versus 2024 and at the high end of guidance.
Negative Updates
Tariffs and Trade Uncertainty
Tariffs, trade uncertainty and volatility negatively impacted 2025 revenues by more than $350 million. Management expects continued uncertainty tied to USMCA review and has assumed tariffs remain at current levels for 2026 planning.
Read all updates
Q4-2025 Updates
Positive
Negative
Strong EPS and Earnings Performance
Q4 adjusted diluted EPS rose ~14% year-over-year; reported diluted EPS grew 12% in the quarter. Full-year adjusted diluted EPS was $7.63, up 7% versus 2024 and at the high end of guidance.
Read all positive updates
Company Guidance
CN offered directional 2026 guidance tied to volumes, forecasting revenue ton-miles and volumes to be flattish with 2025 and EPS to grow slightly ahead of volume growth; management expects free cash flow to increase off a 2025 base of $3.3 billion (+8%) while cutting CapEx to $2.8 billion (‑$500 million vs 2025) to improve cash conversion. They plan a deliberate, temporary step-up in leverage to roughly 2.7x in 2026 (returning to ~2.5x in 2027) to accelerate share repurchases after buying ~15 million shares for ~$2 billion in 2025 and authorizing up to 24 million more (Feb 4, 2026–Feb 3, 2027). Modeling assumes CAD/USD at $0.715 with sensitivity of ~ $0.05 EPS per $0.01 FX move (current spot implying ~ $0.10 EPS headwind); expected 2026 effective tax rate is 25–26% (2025: 24.7%). Management reiterated pricing to outpace rail cost inflation and continued productivity gains (though smaller than 2025), but flagged headwinds including unfavorable mix (forest products/metals), roughly $100M lower capital credits, a similar reduction in other income versus 2025, and the need to lap prior-year efficiency gains; Q4 adjusted OR was 60.1% and FY adjusted OR 61.7% (‑120 bps vs 2024).Canadian National Railway Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
74
Positive
Cash Flow
70
Positive
| 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
Positive
149.04
Price Trends
142.82
Positive
138.44
Positive
135.00
Positive
Market Momentum
0.84
Negative
64.95
Neutral
88.65
Negative
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 149.04 is above the 20-day moving average (MA) of 141.94, above the 50-day MA of 142.82, and above the 200-day MA of 135.00, indicating a bullish trend. The MACD of 0.84 indicates Negative momentum. The RSI at 64.95 is Neutral, neither overbought nor oversold. The STOCH value of 88.65 is Negative, 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 |
|---|---|---|---|---|---|---|---|
77 Outperform | C$91.12B | 16.73 | 21.95% | 2.62% | 0.23% | -13.22% | |
70 Outperform | C$101.41B | 22.36 | 8.90% | 0.82% | 4.02% | 21.39% | |
68 Neutral | C$11.34B | 19.57 | 24.05% | 1.58% | 1.32% | 24.27% | |
66 Neutral | C$707.02M | 10.32 | 10.91% | 5.09% | 3.71% | -12.70% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
63 Neutral | C$13.71B | 29.16 | 11.65% | 1.75% | -0.25% | -28.71% |
* Industrials Sector Average
TSE:CNR
Canadian National Railway
149.04
13.80
10.21%
TSE:CP
Canadian Pacific Kansas City
112.96
10.60
10.36%
TSE:TFII
TFI International
166.86
52.62
46.06%
TSE:FTT
Finning International
86.83
48.94
129.18%
TSE:WJX
Wajax Corporation
32.36
16.16
99.75%
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.