Benchmark holds Canadian National Railway stock rating

On Monday, Benchmark analysts retained their Hold rating on Canadian National Railway (TSX:CNR) (NYSE:CNI) stock, a prominent player in the Ground Transportation industry with a market capitalization of $62.95 billion. Analyst Nathan P. Martin highlighted the company’s first-quarter earnings per share (EPS) of C$1.85, which surpassed both the consensus estimate of C$1.78 and Benchmark’s own forecast of C$1.77. The better-than-expected results were attributed to strong revenue performance, supported by impressive gross profit margins of 54.79%. According to InvestingPro analysis, the stock is currently trading near its Fair Value, with 12 additional key insights available to subscribers.

Despite potential economic headwinds from trade and tariff uncertainties, Canadian National Railway has kept its full-year EPS growth target of 10%-15%. This outlook is based on an anticipated low- to mid-single digit increase in revenue ton-miles (RTMs) and pricing that is expected to exceed rail inflation rates. The company also expects a robust second-half volume growth, which is seen as essential for meeting the EPS guidance set by management. With a P/E ratio of 19.44 and analyst consensus suggesting potential upside, InvestingPro subscribers can access detailed valuation metrics and comprehensive research reports for deeper insights into CNI’s growth prospects.

Canadian National Railway acknowledged challenges in the international intermodal segment due to blank sailings but remains optimistic about overcoming last year’s labor, rail, and terminal disruptions. The company’s network is recovering from severe weather conditions experienced in the first quarter, and pricing remains robust. Management is committed to executing its strategic plan and leveraging specific growth opportunities while staying responsive to customer needs during uncertain economic times.

The report also noted that currency fluctuations might pose an EPS headwind, as the current spot Canadian dollar is stronger than what the company had assumed in its projections. Nonetheless, Canadian National Railway’s management has reaffirmed its target for a high-single digit adjusted EPS compound annual growth rate (CAGR) from 2024 to 2026.

In other recent news, Canadian National Railway reported first-quarter earnings that exceeded analyst expectations, with a 4% year-over-year increase in revenue despite challenging winter conditions and macroeconomic uncertainty. The company posted adjusted earnings per share of C$1.85, surpassing the consensus estimate of C$1.79, with total revenue reaching C$4.4 billion, slightly above the forecasted C$4.38 billion. Additionally, the operating ratio improved to 63.4%, and revenue ton miles increased by 1% to 60,049 million. The company maintained its 2025 guidance, projecting adjusted diluted EPS growth of 10-15% and planning capital investments of approximately C$3.4 billion. However, Canadian National Railway highlighted potential risks, including heightened recessionary concerns related to tariffs and trade actions. In another development, Stephens analyst Justin Long raised the price target for Canadian National Railway shares from $105.00 to $109.00, maintaining an Equal Weight rating. This revision follows the company’s first-quarter performance, which exceeded expectations due to sustained growth in revenue per carload. Despite some caution regarding near-term volume predictions, the company is on track with its revenue ton-miles guidance, although it remains at the lower end of the EPS growth projection.

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