Equities researchers at Loop Capital began coverage on shares of Canadian National Railway Co. (NYSE:CNI) in a report released on Monday. The brokerage set a “hold” rating on the stock.
The analysts wrote, “With the railroad operating ratio falling from 89 percent at the time of the IPO to ~56 percent this year, and with pricing continuing to outpace productivity-adjusted cost inflation, it’s only a matter of time before management will be forced to choose whether or not to cross the 50 percent Rubicon, triggering greater regulatory scrutiny including possible re-regulation,” analyst Rick Paterson wrote in a note.Paterson said the business should remain “somewhat stagnant” in to 2017 due to weak energy markets and lower demand from industries. However, grain and intermodal are the two bright spots in otherwise dull story.Related Link: The Week In Rails: Carloads For The Big 6The analyst expects the company’s intermodal volumes in 2017 to be positive versus year-to-date decline of 2.2 percent in 2016. In terms of materiality, intermodal and agriculture combined represent 40 percent of total year-to-date sales at Canadian National.Meanwhile, pricing is inflating faster than costs and the analyst expects 2017 core pricing to be in the low- to mid-2 percent range. In fact, the Canadian Transportation Agency, in formulating its latest grain cap projects the company’s (and Canadian Pacific Railway Limited (USA) (NYSE: CP)’s) wage and benefits inflation in 2016/2017 projected to be 1.4 percent, materials inflation of 1.5 percent, and other non-fuel items up 1.2 percent. “So the margin story isn’t, quite, over for CN, and if we factor in some headwind from likely higher fuel prices in 2017 we still come up with a 60 basis point improvement in the operating ratio to 55.1 percent and EPS a little over $5/share,”
Several other equities research analysts have also recently issued reports on the stock. Citigroup Inc. boosted their price objective on shares of Canadian National Railway from $61.00 to $66.00 and gave the company a “neutral” rating in a research report on Tuesday, September 13th. Barclays PLC boosted their price objective on shares of Canadian National Railway from $65.00 to $68.00 and gave the company an “equal weight” rating in a research report on Monday, September 12th. Atlantic Securities began coverage on shares of Canadian National Railway in a research report on Thursday, August 11th. They issued a “neutral” rating for the company. TD Securities reissued a “hold” rating and issued a $87.00 price objective (up from $86.00) on shares of Canadian National Railway in a research report on Tuesday, July 26th. Finally, Scotiabank reissued a “sector perform” rating and issued a $87.00 price objective (up from $81.00) on shares of Canadian National Railway in a research report on Tuesday, July 26th. Two equities research analysts have rated the stock with a sell rating, fourteen have given a hold rating and ten have assigned a buy rating to the company. The company has a consensus rating of “Hold” and an average target price of $73.99.
Shares of Canadian National Railway (NYSE:CNI) opened at 63.72 on Monday. The company has a market cap of $49.17 billion, a P/E ratio of 18.53 and a beta of 1.12. The company’s 50 day moving average is $63.88 and its 200 day moving average is $61.62. Canadian National Railway has a 12 month low of $46.23 and a 12 month high of $66.22.
Canadian National Railway (NYSE:CNI) last released its quarterly earnings data on Monday, July 25th. The company reported $1.11 earnings per share (EPS) for the quarter, beating the consensus estimate of $1.09 by $0.02. The company earned $2.84 billion during the quarter, compared to analysts’ expectations of $3 billion. Canadian National Railway had a net margin of 29.55% and a return on equity of 24.13%. The firm’s quarterly revenue was down 9.1% on a year-over-year basis. During the same period in the previous year, the company earned $1.15 EPS. On average, equities research analysts predict that Canadian National Railway will post $3.44 EPS for the current fiscal year.
The company also recently declared a dividend, which will be paid on Friday, September 30th. Investors of record on Friday, September 9th will be given a dividend of $0.288 per share. The ex-dividend date of this dividend is Wednesday, September 7th. Canadian National Railway’s dividend payout ratio is presently 33.72%.
A number of hedge funds have recently added to or reduced their stakes in CNI. Kistler Tiffany Companies LLC raised its stake in Canadian National Railway by 81.9% in the second quarter. Kistler Tiffany Companies LLC now owns 1,699 shares of the company’s stock valued at $100,000 after buying an additional 765 shares in the last quarter. Pinkerton Retirement Specialists LLC purchased a new stake in Canadian National Railway during the second quarter valued at approximately $104,000. Bessemer Group Inc. raised its stake in Canadian National Railway by 119.4% in the first quarter. Bessemer Group Inc. now owns 1,968 shares of the company’s stock valued at $123,000 after buying an additional 1,071 shares in the last quarter. Armbruster Capital Management Inc. raised its stake in Canadian National Railway by 57.1% in the second quarter. Armbruster Capital Management Inc. now owns 2,200 shares of the company’s stock valued at $130,000 after buying an additional 800 shares in the last quarter. Finally, Checchi Capital Advisers LLC raised its stake in Canadian National Railway by 5.3% in the second quarter. Checchi Capital Advisers LLC now owns 2,680 shares of the company’s stock valued at $158,000 after buying an additional 134 shares in the last quarter. Institutional investors own 56.06% of the company’s stock.
Canadian National Railway Company Profile
Canadian National Railway Co is engaged in the rail and related transportation business. The Company’s network of approximately 20,000 route miles of track spans Canada and mid-America, connecting approximately three coasts, including the Atlantic, the Pacific and the Gulf of Mexico. The Company’s freight includes approximately seven commodity groups, such as petroleum and chemicals, metals and minerals, forest products, coal, grain and fertilizers, intermodal and automotive.
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