Bernstein analyst David Vernon downgraded Canadian National to Market Perform from Outperform with a price target of $130.67, down from $146.25. The company “seems stuck” for the near term on Q2 cost pressure and potential intermodal book around due to strike risk, the analyst tells investors in a research note. The firm cites shorter-term concerns for the downgrade, but adds Canadian National’s earnings ramp from 2024 to 2025 and 2026 is “getting steeper.” Canadian National is facing cost pressure on below-consensus volume in Q2, and could see bookaway from Prince Rupert in Q3 due to strike risk, making it likely that the company will need to back down expectations for 10% fiscal 2024 earnings growth, contends Bernstein.
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