Canadian National Railway (NYSE:CNI) Posts Earnings Results, Beats Expectations By $0.05 EPS

Key Points

• Canadian National Railway beat earnings expectations: The company reported EPS of C$1.54, topping the C$1.49 consensus estimate, while adjusted third-quarter EPS rose 18% to C$2.16 on 4% volume growth and 15% revenue growth.
• Operating and financial performance strengthened: CN improved its adjusted operating ratio, increased year-to-date free cash flow 25% to C$2.9 billion, repurchased nearly 4 million shares, and reaffirmed full-year adjusted EPS growth guidance in the mid-to-high single digits.
• Risks remain despite the positive outlook: Weaker coal and overseas intermodal volumes, labor-related disruptions, tougher fourth-quarter comparisons, and an expiring labor agreement could pressure results. Analysts maintain a consensus “Hold” rating with an average price target of $137.49.

Canadian National Railway (NYSE:CNI - Get Free Report) TSE: CNR issued its earnings results on Friday. The transportation company reported $1.54 earnings per share (EPS) for the quarter, topping the consensus estimate of $1.49 by $0.05, Zacks reports. Canadian National Railway had a net margin of 26.92% and a return on equity of 22.22%. The company's quarterly revenue was down 99.9% on a year-over-year basis. During the same quarter in the previous year, the firm earned $1.83 earnings per share.

Here are the key takeaways from Canadian National Railway's conference call:

• Q3 performance was strong: adjusted diluted EPS rose 18% to CAD 2.16 on 4% volume growth, while revenue increased 15% and the adjusted operating ratio improved 40 basis points to 61%.
• CN reported meaningful operating gains, including record third-quarter fuel efficiency, 7% employee productivity growth, 5% locomotive productivity growth, and approximately CAD 120 million in realized Fast Track benefits year-to-date.
• Financial flexibility improved, with year-to-date free cash flow up 25% to CAD 2.9 billion; CN repurchased nearly 4 million shares for about CAD 675 million and expects leverage to return to approximately 2.5 times by year-end.
• Management reaffirmed full-year adjusted EPS growth guidance at mid-to-high single digits and said results are tracking toward the upper end, supported by available network capacity and growth opportunities in energy, automotive, Canadian resources, and a planned Mexico connection with Union Pacific.
• Near-term risks include weaker coal and overseas intermodal volumes, a labor disruption at the Prince Rupert coal terminal, tougher fourth-quarter comparisons, and an estimated CAD 0.03 per-share 2027 impact from changes to Elk Valley Resources traffic; CN’s labor agreement with TCRC also expires at year-end.

Canadian National Railway Trading Down 0.2%

Shares of NYSE CNI traded down $0.24 during trading on Friday, hitting $123.82. 1,837,876 shares of the company were exchanged, compared to its average volume of 1,500,254. The company has a debt-to-equity ratio of 0.99, a quick ratio of 0.61 and a current ratio of 0.87. The firm has a market capitalization of $74.61 billion, a PE ratio of 21.95, a P/E/G ratio of 2.23 and a beta of 0.96. The company has a fifty day moving average price of $121.78 and a 200-day moving average price of $115.22. Canadian National Railway has a 12-month low of $90.74 and a 12-month high of $131.55.

Wall Street Analysts Forecast Growth

A number of brokerages have recently commented on CNI. Barclays upped their target price on Canadian National Railway from $109.00 to $130.00 and gave the stock an "equal weight" rating in a research note on Monday, July 27th. Royal Bank Of Canada lifted their price objective on shares of Canadian National Railway from $195.00 to $205.00 and gave the company an "outperform" rating in a report on Monday, July 27th. Susquehanna dropped their price objective on Canadian National Railway from $142.00 to $130.00 and set a "neutral" rating on the stock in a report on Friday, October 2nd. Wells Fargo & Company upped their target price on Canadian National Railway from $135.00 to $145.00 and gave the stock an "overweight" rating in a research note on Monday, July 27th. Finally, Argus reiterated a "hold" rating on shares of Canadian National Railway in a research report on Monday, August 31st. Nine equities research analysts have rated the stock with a Buy rating and ten have assigned a Hold rating to the stock. According to MarketBeat.com, Canadian National Railway has a consensus rating of "Hold" and an average price target of $137.49.

More Canadian National Railway News

Here are the key news stories impacting Canadian National Railway this week:

• Positive Sentiment: CN reported third-quarter adjusted earnings of C$1.54 per share, exceeding the Zacks consensus estimate of C$1.49. Coverage also described higher profit and a revenue surge, helped by strong pricing across freight segments, indicating resilient demand and pricing power. Canadian National Surpasses Q3 Earnings and Revenue Estimates
• Positive Sentiment: The board approved a fourth-quarter dividend of C$0.915 per share, payable December 30 to shareholders of record on December 9. The continued dividend reinforces CNI’s income appeal and signals confidence in cash generation. CN Declares Fourth-Quarter 2026 Dividend
• Neutral Sentiment: The quarter’s results and operating performance were released before the market, giving investors updated information on freight demand, pricing and execution. The earnings beat is favorable, although investors may focus on the complete outlook and management commentary for evidence that momentum can continue. CN Delivers Strong Third Quarter Performance
• Negative Sentiment: CFO Ghislain Houle will retire effective February 1, 2027, with investor-relations executive Jamie Lockwood succeeding him. The internal appointment should support continuity, but leadership changes can temporarily increase execution and oversight concerns. CN Announces CFO Retirement and Successor

About Canadian National Railway

Canadian National Railway Company NYSE: CNI is a transportation and logistics company that operates a major freight railway network across Canada and the United States. The company provides rail, intermodal and related transportation services for shippers, connecting production and consumption centers with ports and distribution hubs.

CN transports a broad range of commodities and manufactured goods, including petroleum and chemicals, grain and fertilizers, forest products, metals and minerals, coal, automotive products and consumer goods.

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