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Canadian National Railway Co CNI

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Morningstar’s Analysis

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Canadian National Posts Solid Q2 Carloads, Cost Inflation Tempers Margins; 2021 Guidance Reiterated

Matthew Young, CFA Equity Analyst

Analyst Note

| Matthew Young, CFA |

Wide-moat rail Canadian National’s second-quarter revenue growth accelerated to 20% year over year, excluding foreign exchange, driven by solid recovery in carload volumes and core yield improvement. Total carload volume was up 13.5%, versus 7% in first quarter, which faced weather headwinds. Adjusting for foreign exchange, average revenue per carload rose 7%, due to solid same-store pricing (up 4%-plus) and (likely) improving mix in terms of recovering automotive, lumber, and propane shipments. Core pricing is benefiting from limited capacity across most transportation modes, which is lifting railroads’ pricing power.

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Company Profile

Business Description

Canadian National's railway spans Canada from coast to coast and extends through Chicago to the Gulf of Mexico. In 2019, CN delivered almost 6 million carloads over its 19,600 miles of track. CN generated roughly CAD 14 billion in total revenue by hauling intermodal containers (25% of consolidated revenue), petroleum and chemicals (21%), grain and fertilizers (16%), forest products (12%), metals and mining (11%), automotive shipments (6%), and coal (4%). Other items constitute the remaining revenue.

Contact
935 de La Gauchetiere Street West
Montreal, QC, H3B 2M9, Canada
T +1 514 399-7091
Sector Industrials
Industry Railroads
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type
Employees 24,376

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