Canadian National Railway (CNR) AI Stock Analysis

• Market Cap: $80.77B
• Dividend Yield: 2.72%
• Average Volume (3M): 1.32M
• Price to Earnings (P/E): 17.8
• Beta (1Y): 0.73
• Revenue Growth: 0.63%
• EPS Growth: -14.20%
• Country: CA
• Employees: 24,911
• Sector: Industrials
• Sector Strength: 84
• Industry: Railroads
• EPS (TTM): 1.87
• Shares Outstanding: 624,200,000
• 10 Day Avg. Volume: 1,539,802
• 30 Day Avg. Volume: 1,324,650
• PEG Ratio: -1.16
• Price to Book (P/B): 4.39
• Price to Sales (P/S): 5.42
• P/FCF Ratio: 29.36
• Enterprise Value/Market Cap: 1.35
• Enterprise Value/Revenue: 6.37
• Enterprise Value/Gross Profit: 15.44
• Enterprise Value/Ebitda: 12.32
• 1Y Price Target: $161.45
• Price Target Upside: 27.05% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 21

• Rating: 68 Neutral
• Price Target: C$143.00 ▲(12.54% Upside)

Canadian National Railway's overall stock score reflects strong financial health and a stable valuation. However, bearish technical indicators and macroeconomic challenges highlighted in the earnings call weigh on the score. The company's ability to navigate these challenges while maintaining operational efficiency is crucial for future performance.

Positive Factors

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.

Infrastructure and Services

The expanded logistics ecosystem in intermodal services has the potential to support a more competitive service in coming years.

Operating Efficiency

CNR operates one of the best franchises in the rail industry, and there is a renewed opportunity to improve operating efficiency and ROIC.

Negative Factors

Foreign Exchange Impact

A stronger than originally anticipated CAD remains a headwind.

Revenue Guidance

CNR is withdrawing its F2024-F2026 outlook of high-single-digit growth given the more muted revenue backdrop and limited visibility into when demand inflection may occur.

Tariff Impact

Tariff uncertainty drives full-year guidance lower.

Canadian National Railway Business Overview & Revenue Model

Company Description

Canadian National Railway (CNR) is one of North America's largest railway networks, providing comprehensive rail and related transportation services. Headquartered in Montreal, Quebec, CNR operates a track network of approximately 20,000 route-miles, spanning Canada and mid-America, connecting the Atlantic, the Pacific, and the Gulf of Mexico. The company's core offerings include the transportation of various goods such as petroleum and chemicals, grain and fertilizers, coal, metals and minerals, forest products, intermodal, and automotive products.

How the Company Makes Money

CNR makes money primarily through its freight transportation services, which account for the majority of its revenue. The company has a diverse portfolio of goods it transports, including petroleum and chemicals, grain and fertilizers, coal, metals and minerals, forest products, intermodal, and automotive products. Each of these segments contributes to its revenue stream, with intermodal and petroleum and chemicals being significant contributors. CNR also benefits from long-term contracts with key customers and strategic partnerships with other logistics and transportation companies, enhancing its service offerings and network efficiency. Additionally, CNR generates revenue through ancillary services such as warehousing, distribution, and logistics solutions, which complement its core rail transportation services.

Canadian National Railway Financial Statement Overview

Summary

Canadian National Railway shows strong financial health with robust profitability, efficient operations, and solid cash flow generation. Despite minor profitability fluctuations, it maintains a stable financial position with moderate leverage and consistent revenue 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	17.14B	17.05B	16.83B	17.11B	14.48B	13.82B
Gross Profit	7.08B	6.97B	7.15B	7.40B	6.07B	5.77B
EBITDA	8.86B	8.63B	9.03B	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 Price: 127.07
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• 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 127.07 is below the 20-day moving average (MA) of 134.54, below the 50-day MA of 139.26, and below the 200-day MA of 143.03, indicating a bearish trend. The MACD of -3.51 indicates Positive momentum. The RSI at 27.79 is Positive, neither overbought nor oversold. The STOCH value of 24.35 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
CJT	77 Outperform	$1.58B	11.07	19.73%	1.37%	14.37%	―
AC	71 Outperform	C$5.72B	4.67	101.32%	―	0.33%	-15.99%
CP	71 Outperform	$96.55B	23.44	9.10%	0.77%	4.77%	20.28%
GFL	69 Neutral	$25.48B	9.57	-0.03%	0.12%	-5.22%	-129.20%
CNR	68 Neutral	$80.77B	17.83	21.83%	2.72%	0.63%	-14.20%
Sector *	66 Neutral	4.57B	9.05	13.26%	3.68%	4.42%	4.61%
TFII	63 Neutral	$10.21B	20.39	13.80%	2.07%	16.00%	-17.63%

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.