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Canadian National Railway Company (TSE:CNR)
:CNR
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Canadian National Railway
(NYSE:CNR)
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Rating:66Neutral
Price Target:
C$142.00
▲(10.37% Upside)
Canadian National Railway's overall stock score reflects its strong financial performance and effective cost management, despite recent revenue and free cash flow declines. Technical indicators suggest a bearish trend, while valuation metrics indicate fair pricing. The earnings call provided a mixed outlook, with operational strengths offset by macroeconomic challenges.
Positive Factors
Negative Factors
Canadian National Railway (CNR) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$80.31B
Dividend Yield2.73%
Average Volume (3M)2.12M
Price to Earnings (P/E)17.7
Beta (1Y)0.66
Revenue Growth0.63%
EPS Growth-14.20%
CountryCA
Employees24,911
SectorIndustrials
Sector Strength72
IndustryRailroads
Share Statistics
EPS (TTM)1.87
Shares Outstanding624,200,000
10 Day Avg. Volume2,580,542
30 Day Avg. Volume2,122,114
Financial Highlights & Ratios
PEG Ratio-1.16
Price to Book (P/B)4.39
Price to Sales (P/S)5.42
P/FCF Ratio29.36
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$159.37Price Target Upside23.87% 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
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.75
Positive
Balance Sheet
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.70
Positive
Cash Flow
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.65
Positive
| 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 | 15.89B | 12.91B | 13.32B |
| 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
Negative
128.66
Price Trends
131.55
Negative
136.38
Negative
139.08
Negative
Market Momentum
-0.52
Positive
42.20
Neutral
41.99
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 128.66 is below the 20-day moving average (MA) of 131.07, below the 50-day MA of 131.55, and below the 200-day MA of 139.08, indicating a bearish trend. The MACD of -0.52 indicates Positive momentum. The RSI at 42.20 is Neutral, neither overbought nor oversold. The STOCH value of 41.99 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
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | 95.86B | 23.27 | 9.05% | 0.76% | 4.77% | 20.28% | |
68 Neutral | 1.53B | 10.71 | 19.91% | 1.42% | 14.37% | 0.00% | |
66 Neutral | C$80.31B | 17.73 | 21.83% | 2.73% | 0.63% | -14.20% | |
63 Neutral | 10.68B | 21.32 | 0.00% | 1.90% | 6.04% | -20.31% | |
61 Neutral | 5.60B | 4.57 | 82.54% | ― | 0.33% | -15.99% | |
52 Neutral | 23.26B | -14.53 | -22.62% | 0.13% | -5.22% | -129.20% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
Performance Comparison
TSE:CNR
Canadian National Railway
128.66
-25.67
-16.63%
CP
Canadian Pacific Kansas City
75.61
-9.33
-10.98%
TFII
TFI International
93.45
-50.21
-34.95%
ACDVF
Air Canada
13.74
1.94
16.44%
CGJTF
Cargojet
71.47
-24.63
-25.63%
GFL
GFL Environmental
46.45
6.85
17.30%
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.