Canadian National Railway (CNR) AI Stock Analysis

• Market Cap: C$85.73B
• Dividend Yield: 2.62%
• Average Volume (3M): 1.33M
• Price to Earnings (P/E): 18.9
• Beta (1Y): 0.60
• Revenue Growth: 0.23%
• EPS Growth: -13.22%
• Country: CA
• Employees: 24,911
• Sector: Industrials
• Sector Strength: 72
• Industry: Railroads
• EPS (TTM): 1.83
• Shares Outstanding: 615,500,000
• 10 Day Avg. Volume: 1,173,463
• 30 Day Avg. Volume: 1,331,123
• 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: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$160.26
• Price Target Upside: 15.06% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 15
• EPS Forecast (FY): 8.09
• Revenue Forecast (FY): C$17.88B

• Rating: 77 Outperform
• Price Target: C$153.00 ▲(9.85% Upside)

Canadian National Railway's strong financial performance and strategic adjustments in capital expenditure and productivity are significant strengths. The technical indicators show positive momentum, and the valuation is reasonable. However, macroeconomic challenges and safety concerns present risks that could impact future performance.

Positive Factors

Revenue Growth

Strong revenue growth indicates robust demand for CNR's services, enhancing its market position and supporting long-term financial stability.

Operational Efficiency

High operational efficiency reflects CNR's ability to optimize its network, improving service reliability and customer satisfaction, which are crucial for long-term success.

Record Grain Movement

Achieving consecutive record months for grain movement showcases CNR's capacity to handle high volumes, strengthening its competitive edge in the freight industry.

Negative Factors

Increasing Debt Levels

Rising debt levels could strain CNR's cash flow and limit financial flexibility, potentially impacting its ability to invest in future growth opportunities.

Safety Concerns

Increased safety incidents can lead to regulatory scrutiny and higher operational costs, affecting CNR's reputation and long-term operational efficiency.

Macroeconomic Challenges

Persistent macroeconomic challenges could dampen demand for freight services, impacting CNR's revenue growth and profitability over the medium term.

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 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 Money

CNR generates revenue primarily through the transportation of freight across its extensive railway network. The company's revenue model is based on charging customers for the shipment of goods, which includes various freight categories such as intermodal containers, bulk commodities, and finished vehicles. Key revenue streams include charges for long-haul transportation, terminal services, and logistics solutions. Additionally, CNR benefits from long-term contracts with major shippers in sectors like agriculture and mining, which provide a stable income base. Strategic partnerships with logistics companies enhance its service offerings, allowing CNR to capture a broader market share and improve operational efficiency.

Canadian National Railway Financial Statement Overview

Summary

Canadian National Railway demonstrates strong financial health with impressive revenue growth and profitability. The balance sheet is stable, though increasing debt levels warrant attention. Cash flow generation is solid, supporting ongoing operations and investments. Overall, the company is well-positioned in the railroads industry.

Income Statement

Canadian National Railway shows strong revenue growth with a TTM increase of 32.1%, indicating robust demand. The company maintains healthy profitability with a gross profit margin of 51.82% and a net profit margin of 26.62%. However, the slight decline in gross profit margin from the previous year suggests potential cost pressures.

Balance Sheet

The balance sheet is solid with a debt-to-equity ratio of 0.96, reflecting balanced leverage. Return on equity remains strong at 21.82%, showcasing efficient use of equity. However, the increase in total debt over the years could pose a risk if not managed carefully.

Cash Flow

Operating cash flow is robust with a coverage ratio of 1.90, indicating good cash generation relative to net income. Free cash flow growth is positive at 6.49%, suggesting improved cash efficiency. However, the free cash flow to net income ratio of 0.48 indicates room for improvement in converting income to cash.

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	8.40B	9.31B	9.45B	9.62B	8.11B	7.65B
EBITDA	8.96B	8.67B	8.89B	9.07B	7.61B	7.65B
Net Income	4.62B	4.45B	5.63B	5.12B	4.90B	3.54B
Balance Sheet
Total Assets	57.65B	57.07B	52.67B	50.66B	48.54B	44.80B
Cash, Cash Equivalents and Short-Term Investments	226.00M	389.00M	475.00M	328.00M	838.00M	569.00M
Total Debt	21.46B	21.37B	18.89B	15.89B	12.91B	13.32B
Total Liabilities	36.38B	36.02B	32.55B	29.28B	25.79B	25.15B
Stockholders Equity	21.27B	21.05B	20.12B	21.38B	22.74B	19.65B
Cash Flow
Free Cash Flow	3.44B	3.15B	3.78B	3.92B	4.08B	3.30B
Operating Cash Flow	6.82B	6.70B	6.96B	6.67B	6.97B	6.17B
Investing Cash Flow	-3.44B	-3.61B	-3.47B	-2.51B	-2.87B	-2.95B
Financing Cash Flow	-3.85B	-3.62B	-3.41B	-4.67B	-3.86B	-2.71B

Canadian National Railway Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 139.28
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• 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 Positive. The current price of 139.28 is above the 20-day moving average (MA) of 136.44, above the 50-day MA of 134.47, and above the 200-day MA of 134.51, indicating a bullish trend. The MACD of 0.88 indicates Negative momentum. The RSI at 58.71 is Neutral, neither overbought nor oversold. The STOCH value of 56.26 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FTT	78 Outperform	C$11.22B	21.62	19.66%	1.58%	1.32%	24.27%
CNR	77 Outperform	C$85.73B	18.91	22.24%	2.62%	0.23%	-13.22%
CP	74 Outperform	C$90.93B	21.93	9.32%	0.82%	4.02%	21.39%
WJX	69 Neutral	C$612.81M	13.30	8.84%	5.09%	3.71%	-12.70%
TFII	67 Neutral	C$12.77B	28.82	11.98%	1.75%	-0.25%	-28.71%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
GDI	61 Neutral	C$855.81M	20.37	8.55%	―	-2.83%	179.03%