Canadian National Railway
Canadian National Railway (CNR) has recently released its Q1/24 earnings report, showcasing a performance that aligns with expectations and sets a trajectory towards its projected growth. With analysts closely monitoring its progress, CNR’s financials and outlook offer insights into the railway giant’s stability and future prospects.
Earnings Performance
CNR reported its Q1/24 earnings per share (EPS) in line with expectations, demonstrating progress towards achieving approximately 10% EPS growth. Analysts Cherilyn Radbourne, CPA, CA, CFA, and Patrick Sullivan express optimism about the company’s performance, reinforcing investor confidence in its trajectory.
Financial Overview
- Symbol: TSX: CNR-CA
- 12-Month Dividend (Est.): C$3.45
- Beta: 0.88
- 12-Month Total Return: 9.4%
- 52-Week Range: C$179.82-C$144.28
- Market Cap: C$113.3B
- Net Debt (MM): C$18,236.0
- Cash/Share: C$5.73
- Diluted Shares Out (MM): 659.1
- Float Shares (MM): 641.9
- Float Cap ($mm): C$113,533
- Net Debt/EBITDA: 2.2x
- Enterprise Value (MM): C$134,486.3
- BV/Share: C$31.30
- Dividend: C$3.22
- Yield: 1.8%
Financial Projections
- 2023A: C$8,414.0 (EBITDA)
- 2024E: C$9,022.0 (EBITDA)
- 2025E: C$9,924.0 (EBITDA)
- 2026E: C$10,706.0 (EBITDA)
Quarterly EPS
- Q1: C$1.82 (Actual) | C$1.72 (Estimated)
- Q2: C$1.76 (Estimated)
- Q3: C$1.69 (Estimated)
- Q4: C$2.02 (Estimated)
Analyst Insight
Analysts anticipate a modest increase in Street confidence following Q1/24 results, expecting around 10% EPS growth. However, given the current trading multiples, the quarter might not provide significant upside catalyst for the share price.
Earnings Impact
Q1/24 results were slightly positive, with revenue declining 1% y/y due to lower fuel surcharge revenue. CN reaffirmed its 2024 guidance, characterizing Q1/24 as on plan or slightly ahead.
Outlook
CNR reaffirms its outlook for ~10% adjusted diluted EPS growth in 2024. Mid-single-digit RTM growth is expected, driven by various growth initiatives.
Valuation
CNR is trading at 22.1x 2024E EPS (consensus), at the high-end of historical range. The target price of $190 is based on 20.0x EPS estimate for the 12 months ending March 31, 2026.
Investment Risks
Economic downturns, labour disruptions, regulatory changes, competition, and weather disruptions pose risks. CN estimates a $0.01 weakening/strengthening of the Canadian dollar relative to the U.S. dollar affects annual EPS by ~$0.04.
CNR Stock Forecast & Analysis
Analysts play a crucial role in guiding investors by providing insights into a company’s performance and future prospects. For Canadian National Railway Co (CNR), the consensus among analysts offers valuable guidance for investors looking to understand the stock’s potential trajectory.
Based on the forecasts of 20 analysts, the average target price for CNR over the next 12 months stands at CAD 171.30. This target price serves as a benchmark for investors, indicating the level at which analysts believe the stock should be valued in the near future.
The average analyst rating for CNR is “Buy,” reflecting a positive sentiment towards the stock’s performance and growth prospects. This rating underscores analysts’ confidence in CNR’s ability to deliver value to investors over time.
Stock Target Advisor, a trusted source for stock analysis, has conducted its own assessment of CNR’s outlook. Their analysis categorizes CNR as “Bullish,” indicating a positive outlook based on the evaluation of various signals.
At the last closing, CNR’s stock price was recorded at CAD 176.79. This price point serves as a reference for investors, indicating the current market valuation of CNR’s shares.
In terms of recent performance, CNR’s stock price has shown resilience, with a slight increase of +0.52% over the past week. However, over the past month, the stock has experienced a modest decline of -1.39%. Despite this short-term fluctuation, CNR’s stock has demonstrated positive growth over the last year, with an impressive increase of +6.16%.
