Canadian National Railway (CNR) AI Stock Analysis

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Canadian National Railway

(TSX:CNR)

Rating:63Neutral

Price Target:

C$136.00

▲(6.13% Upside)

Canadian National Railway's overall score reflects strong financial performance and reasonable valuation, offset by bearish technical indicators and mixed earnings call results. The company's profitability and efficient operations are strengths, but recent revenue and cash flow declines, along with macroeconomic challenges, pose risks.

Canadian National Railway (CNR) vs. iShares MSCI Canada ETF (EWC)

Market Cap

$79.99B

Dividend Yield2.74%

Average Volume (3M)1.85M

Price to Earnings (P/E)17.7

Beta (1Y)0.74

Revenue Growth0.63%

EPS Growth-14.20%

CountryCA

Employees24,911

SectorIndustrials

Sector Strength71

IndustryRailroads

Share Statistics

EPS (TTM)1.87

Shares Outstanding624,200,000

10 Day Avg. Volume2,076,577

30 Day Avg. Volume1,848,724

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)N/A

P/FCF RatioN/A

Enterprise Value/Market Cap1.37

Enterprise Value/Revenue6.37

Enterprise Value/Gross Profit12.29

Enterprise Value/Ebitda12.37

Forecast

1Y Price Target

$159.72

Price Target Upside24.64% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering19

Canadian National Railway Business Overview & Revenue Model

Company DescriptionCanadian 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 MoneyCNR generates revenue primarily through the transportation of freight across its rail network. The company operates in multiple segments, including carload freight, intermodal, and bulk commodities, each contributing significantly to its revenue streams. Key revenue sources include: 1) Carload freight, which involves transporting various goods such as automotive products, coal, and agricultural products. 2) Intermodal services, where CNR moves shipping containers and trailers over long distances, often in partnership with ocean carriers and trucking companies. 3) Bulk commodities, including grain, petroleum, and forestry products, which are essential to CNR's operations. Additionally, CNR benefits from long-term contracts and partnerships with major industries, ensuring a steady flow of shipments. The company also invests in infrastructure and technology to enhance operational efficiency and expand service offerings, contributing positively to its earnings.

Canadian National Railway Earnings Call Summary

Earnings Call Date:Jul 22, 2025

(Q2-2025)

% Change Since: |

Next Earnings Date:Oct 30, 2025

Earnings Call Sentiment Neutral

The earnings call presents a mixed picture with strong operational performance and bulk volumes contributing to highlights, while significant challenges in the form of trade tariffs and lower revenues weigh on the company's outlook. The company is proactively managing costs and optimizing operations to mitigate the impact of a challenging macroeconomic environment.

Q2-2025 Updates

Positive Updates

Strong Bulk Volumes

Bulk volumes were very strong through the quarter, reflecting CN's advantage network for the agriculture sector and the strength of their market share.

Operational Performance

CN reported improved operating metrics with car velocity at 213 miles per day, a 3% increase in train speed over last year, and a 1% improvement in dwell.

Safety Improvement

Injury ratio improved by 16% year-over-year due to proactive engagement and identifying at-risk behaviors.

Grain and Fertilizers Increase

Revenues for grain and fertilizers increased by 12%, with Canadian grain volumes up 6% and U.S. volumes up nearly 30%.

Margin Improvement

Operating ratio improved by 50 basis points year-over-year to 61.7%, due to cost management and operational efficiencies.

Negative Updates

Tariff and Trade Challenges

Ongoing U.S. trade and tariff actions created uncertainty, impacting merchandise and intermodal segments, particularly in Forest Products and metals.

Revenue Decline

Revenues saw a 1% decline year-over-year, impacted by weaker market fundamentals and an unfavorable mix.

Petroleum and Chemicals Impact

Lower volumes in refined products due to extended turnarounds at refineries; these pressures are expected to continue into Q3.

Intermodal and Merchandise Pressure

Intermodal and merchandise segments are facing ongoing challenges due to tariffs, with a specific impact on international volumes.

Revised Guidance

CN lowered its volume outlook for the second half of the year and revised its full-year volume assumption to low single-digit RTM growth.

Company Guidance

During the second quarter of fiscal year 2025, CN reported a 2% growth in adjusted EPS despite facing challenges such as flat year-over-year carloads and a 1% reduction in RTMs. The company highlighted a strong performance in bulk volumes, particularly in grain and fertilizers, with U.S. grain volumes up nearly 30% and potash RTMs increasing almost 30%. However, a weaker industrial economy and tariffs negatively impacted merchandise and intermodal segments, leading to a 1% decline in revenues. Despite these hurdles, CN achieved a 50 basis point year-over-year improvement in margin, driven by cost containment efforts including an 8% reduction in mainline manifest train starts and a 560-employee furlough across the network. Looking forward, CN adjusted its full-year volume outlook to low single-digit RTM growth due to ongoing tariff uncertainties and macroeconomic conditions but remains focused on leveraging its strong bulk and energy franchises to mitigate these impacts.

Canadian National Railway Financial Statement Overview

Summary

Canadian National Railway demonstrates strong profitability with high EBIT and EBITDA margins, effective cost management, and a balanced capital structure. However, recent declines in revenue growth and free cash flow are concerns that could affect long-term sustainability.

Income Statement

Positive

Canadian National Railway shows strong profitability with a consistent EBIT and EBITDA margin above 40% and 50% respectively, indicating efficient operations. However, the revenue growth rate has been negative recently, which could be a concern if it continues. The net profit margin remains healthy, reflecting good cost management.

Balance Sheet

Positive

The company maintains a reasonable debt-to-equity ratio under 1, suggesting balanced leverage. Return on Equity (ROE) is strong, indicating effective use of equity to generate profits. However, the equity ratio is moderate, suggesting a balanced but not overly conservative capital structure.

Cash Flow

Positive

Operating cash flow remains robust, covering net income well, but free cash flow has seen a decline, which could impact future investments or debt repayments. The free cash flow to net income ratio is healthy, indicating good cash conversion, but recent negative growth in free cash flow is a concern.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	17.14B	17.05B	16.83B	17.11B	14.48B	13.82B
Gross Profit	8.88B	9.31B	9.45B	9.62B	8.11B	7.65B
EBITDA	8.83B	8.67B	8.89B	9.07B	7.61B	7.65B
Net Income	4.56B	4.45B	5.63B	5.12B	4.90B	3.54B
Balance Sheet
Total Assets	56.78B	57.07B	52.67B	50.66B	48.54B	44.80B
Cash, Cash Equivalents and Short-Term Investments	216.00M	389.00M	475.00M	328.00M	838.00M	569.00M
Total Debt	20.75B	21.37B	18.89B	15.77B	12.81B	13.22B
Total Liabilities	35.24B	36.02B	32.55B	29.28B	25.79B	25.15B
Stockholders Equity	21.54B	21.05B	20.12B	21.38B	22.74B	19.65B
Cash Flow
Free Cash Flow	3.23B	3.15B	3.78B	3.92B	4.08B	3.30B
Operating Cash Flow	6.68B	6.70B	6.96B	6.67B	6.97B	6.17B
Investing Cash Flow	-3.51B	-3.61B	-3.47B	-2.51B	-2.87B	-2.95B
Financing Cash Flow	-3.31B	-3.62B	-3.41B	-4.67B	-3.86B	-2.71B

Canadian National Railway Technical Analysis

Technical Analysis Sentiment

Negative

Last Price128.15

Price Trends

50DMA

133.28

Negative

100DMA

136.63

Negative

200DMA

139.85

Negative

Market Momentum

MACD

-0.35

Positive

RSI

38.38

Neutral

STOCH

8.29

Positive

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 128.15 is below the 20-day moving average (MA) of 130.59, below the 50-day MA of 133.28, and below the 200-day MA of 139.85, indicating a bearish trend. The MACD of -0.35 indicates Positive momentum. The RSI at 38.38 is Neutral, neither overbought nor oversold. The STOCH value of 8.29 is Positive, 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

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	63 Neutral	$10.70B	15.26	7.37%	2.02%	2.87%	-14.59%
CNR	63 Neutral	$79.99B	17.66	21.83%	2.74%	0.63%	-14.20%
CP	―	$69.64B	23.67	9.10%	0.77%	―	―
TFII	―	$7.70B	21.33	13.80%	1.89%	―	―
ACDVF	―	$4.04B	4.43	101.32%	―	―	―
CGJTF	―	$1.12B	10.98	19.73%	1.39%	―	―
GFL	―	$17.10B	10.03	-0.03%	0.12%	―	―

* Industrials Sector Average

Performance Comparison

TSE:CNR

Canadian National Railway

128.15

-30.11

-19.03%

Canadian Pacific Kansas City

74.50

-11.63

-13.50%

TFII

TFI International

92.71

-47.80

-34.02%

ACDVF

Air Canada

13.59

2.03

17.56%

CGJTF

Cargojet

72.09

-23.89

-24.89%

GFL

GFL Environmental

47.37

7.16

17.81%

Canadian National Railway Corporate Events

Private Placements and FinancingStock BuybackBusiness Operations and Strategy

CN Launches C$1 Billion Debt Offering for Strategic Growth

Neutral

Jun 6, 2025

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.

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.Date of analysis: Aug 11, 2025