RBC Capital Updates Canadian National (CNI) Outlook Ahead of Rail Earnings Season

Core Viewpoint - Canadian National Railway Company (CNI) is facing challenges due to trade uncertainty between Canada and the US, leading to a reduction in its earnings guidance for 2025, but the long-term outlook remains positive due to its strategic position and profitability [3][4]. Group 1: Earnings Outlook - RBC Capital has lowered its price target for CNI to C$153 from C$158 while maintaining an Outperform rating, reflecting updated models based on carload trends and management commentary [2]. - CNI has cut its 2025 earnings growth guidance from an initial expectation of 10% to 15% to a more conservative outlook, indicating growth is still expected but likely below 10% [3]. Group 2: Strategic Position and Long-term Potential - CNI benefits from long-term economic growth and increasing trade volumes, supported by its extensive rail network that connects key ports across North America [4]. - The company operates a highly profitable and strategically relevant rail network, which is difficult to replicate, positioning it well for future trade developments between Canada and the US [4].