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Canadian National Railway Co CNR

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Stock XTSE Rating as of
CAD 168.35 −8.44 (4.77%)
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Company Report

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Canadian National Earnings: Margins Unspectacular, but Weather a Factor and Guidance Reaffirmed

Matthew Young

Wide-moat Canadian National's first-quarter revenue declined roughly 1.5% year over year due to a slight volume decline, along with easing accessorial income and lower fuel surcharges, which reduced total yield. Core carload pricing remains positive. Revenue was slightly shy of our expected run rate, partly because of coal, which should see sequential recovery in the quarters ahead.

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Price vs Fair Value

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CNR is trading at a 14% premium.
Price
CAD 177.19
Fair Value
CAD 183.00
Uncertainty
Medium
1-Star Price
CAD 532.83
5-Star Price
CAD 668.90
Economic Moat
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Capital Allocation
Pgwplkwy

Bulls Say, Bears Say

Bulls

Over the past year, CN has reinvigorated its precision railroading roots, narrowing the margin gap with peers.

Bears

Grain carload-volume growth will likely take a breather in 2024 on a less robust late-2023 harvest and a less favorable export backdrop (to China).

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Trading Information

Previous Close Price
CAD 176.79
Day Range
CAD 167.61–177.00
52-Week Range
CAD 143.13–181.34
Bid/Ask
CAD 169.50 / CAD 169.50
Market Cap
CAD 107.10 Bil
Volume/Avg
1.7 Mil / 1.0 Mil

Key Statistics

Price/Earnings (Normalized)
23.09
Price/Sales
6.59
Dividend Yield (Trailing)
1.91%
Dividend Yield (Forward)
2.01%
Total Yield
5.92%

Company Profile

Canadian National's railway spans Canada from coast to coast and extends through Chicago to the Gulf of Mexico. In 2023, CN generated CAD 16.8 billion in revenue by hauling intermodal containers (23% of consolidated revenue), petroleum and chemicals (19%), grain and fertilizers (19%), forest products (12%), metals and minerals (12%), automotive shipments (6%), and coal (6%). Other items constitute the remaining revenue.
Sector
Industrials
Industry
Railroads
Stock Style Box
Large Growth
Total Number of Employees
18,299
Website
https://www.cn.ca

Competitors

Valuation

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Metric
CNR
CSX
UNP
Price/Earnings (Normalized)
 23.0918.6122.66
Price/Book Value
 5.385.239.74
Price/Sales
 6.594.585.98
Price/Cash Flow
 15.8112.5216.61
Price/Earnings
CNR
CSX
UNP

Financial Strength

Metric
CNR
CSX
UNP
Quick Ratio
 0.350.880.62
Current Ratio
 0.611.050.81
Interest Coverage
 9.996.957.11
Quick Ratio
CNR
CSX
UNP

Profitability

Metric
CNR
CSX
UNP
Return on Assets (Normalized)
 12.60%8.83%9.63%
Return on Equity (Normalized)
 31.55%30.10%47.89%
Return on Invested Capital (Normalized)
 18.67%13.72%15.34%
Return on Assets
CNR
CSX
UNP
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Railroads Industry Comparables

Screen in Investor
Ticker
Name
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
UNP
Union Pacific CorpRflfdvcpTsn$141.5 Bil
CP
Canadian Pacific Kansas City LtdMzrfwmshsMdyp$81.5 Bil
CNI
Canadian National Railway CoJlpcpfrmGrgx$78.4 Bil
CSX
CSX CorpVpptmgfZzrh$65.8 Bil
NSC
Norfolk Southern CorpFtsgwwtxZpf$53.4 Bil
WAB
Westinghouse Air Brake Technologies Corp—Nqcmx$28.9 Bil
CJPRY
Central Japan Railway Co ADR—Wyybxm$23.3 Bil
CJPRF
Central Japan Railway Co—Mysmtm$23.2 Bil
EJPRF
East Japan Railway Co—Txpysy$21.3 Bil
EJPRY
East Japan Railway Co ADR—Bksjd$21.3 Bil

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