CN's Promising Prospects but Rich Price

At its 2017 investor meeting,

Chief Marketing Officer JJ Ruest presented top-line growth opportunities for the next five years that combined represent CAD 1.5 billion-2.2 billion of incremental revenue (versus a top line of CAD 12 billion in 2016). Intermodal is among the strongest demand sources, with international driven by expansion at Prince Rupert and Vancouver and domestic fed by retail expansion, wholesale partners like J.B. Hunt, and additions to CN's refrigerated container fleet. We expect Canadian grain growth due to crop productivity, and management points to new elevators on its line and expected continued competitive share gains. Related to oil, several new and several expanded petrochemical plants are coming on CN's line in Edmonton, and frac sand demand is vigorously recovering from 2016 in Alberta and Wisconsin. Other recovering commodities include lumber and panel feeding U.S. housing, and coal opportunities at mines opened or scheduled to open by Grande Cache and Conuma. Our existing projections increase revenue CAD 2.2 billion from 2017 to 2021.

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