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MONTREAL - Canadian National Railway Co. (TSX: CNR) (NYSE: CNI), known as CN, has announced a substantial capital expenditure program for 2025, aiming to enhance capacity, safety, and sustainability across its North American rail network. The $67.3 billion market cap company, which maintains a "Fair" financial health rating according to InvestingPro analysis, is set to invest around $3.4 billion CAD, excluding customer reimbursements, into various capital projects throughout the year.
Approximately $2.9 billion of the total investment will go towards maintenance and strategic infrastructure initiatives within Canada and the United States. Notable ongoing projects include the installation of over 225 miles of new rail and about eight capacity-building undertakings in Western Canada, all expected to be operational by year’s end. This infrastructure investment comes as CN maintains impressive gross profit margins of 54.8% and has consistently raised its dividend for 29 consecutive years, demonstrating strong financial discipline. For detailed analysis of CN’s investment potential, including 10 additional exclusive insights, check out the comprehensive Pro Research Report available on InvestingPro.
Further, CN has earmarked over $500 million CAD for the expansion and upgrading of its rolling stock. This move underscores CN’s commitment to maintaining efficient and reliable service for its customers.
Tracy Robinson, President, and CEO of CN, emphasized the strategic nature of the investments, stating, "Our 2025 capital program reflects a clear focus on strengthening the resilience, efficiency, and sustainability of our operations. These investments are about delivering exceptional service today – and building a safer, more connected tomorrow for our customers, employees, supply chain partners, and the economy."
In 2024, CN’s capital investments totaled approximately $3.5 billion CAD, with $1.7 billion dedicated to maintaining the safety and integrity of its network, mainly its track infrastructure. The company also invested significantly in the Greater Chicago and Greater Vancouver areas to improve corridor capacity and fluidity.
The announcement comes with a forward-looking statement, cautioning that current economic conditions may affect the realization of these plans. CN maintains that it will adapt to changes as necessary but does not commit to updating forward-looking statements unless required by securities laws. With an EBITDA of $6.1 billion in the last twelve months and a P/E ratio of 20.9x, CN’s current market valuation appears to be near its InvestingPro Fair Value estimate. Analysts following the company expect earnings per share to reach $5.54 in 2025, though 21 analysts have recently revised their estimates downward.
CN is a major player in the North American transportation sector, safely moving over 300 million tons of goods annually. The company’s nearly 20,000-mile rail network is a critical conduit for trade and the economic well-being of the regions it serves. This investment plan aims to reinforce CN’s pivotal role in supporting sustainable trade and community prosperity.
The information for this report is based on a press release statement.
In other recent news, Canadian National Railway reported first-quarter earnings that exceeded analyst expectations, with adjusted earnings per share reaching C$1.85, surpassing the consensus estimate of C$1.79. The company’s revenue rose 4% year-over-year to C$4.4 billion, slightly above the estimated C$4.38 billion. Despite challenging winter conditions and macroeconomic uncertainties, the company improved its operating ratio to 63.4%. Benchmark analysts retained their Hold rating on the stock, noting the strong revenue performance as a key driver behind the earnings beat. Stephens analyst Justin Long raised the price target for Canadian National Railway shares from $105.00 to $109.00, maintaining an Equal Weight rating. The company reaffirmed its full-year guidance, projecting adjusted diluted EPS growth of 10-15% for 2025, while planning significant capital investments. Management highlighted potential economic headwinds, including trade and tariff uncertainties, but remained optimistic about achieving its financial targets. Canadian National Railway also reiterated its 2024-2026 financial outlook, aiming for a high single-digit compound annual growth rate in adjusted EPS.
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