Canadian National Railway (CNI) Rating Lowered to Hold at Zacks Investment Research

Zacks Investment Research downgraded shares of Canadian National Railway (NYSE:CNI) (TSE:CNR) from a buy rating to a hold rating in a research report sent to investors on Friday.

According to Zacks, “Canadian National performed impressively in the third quarter of 2018, reporting better-than-expected earnings and revenues.  Both metrics also improved year over year. Results were aided by higher freight revenues, which account for bulk of the top line. Apart from the outperformance, the company initiated a new buyback program. Notably, this move is in line with the company's efforts to reward its shareholders. In fact, the company raised its quarterly dividend by 10% earlier this year in another shareholder-friendly move. However, high operating expenses are worrisome. In the third quarter, operating ratio (defined as operating expenses, as a percentage of revenues) deteriorated mainly due to high labor and fuel costs apart from issues related to the Canadian dollar. The company's high debt levels also raise concerns. In a year’s time, shares of the company have underperformed its industry due to the headwinds.”

A number of other research firms have also recently issued reports on CNI. Bank of America cut shares of Canadian National Railway from a buy rating to a neutral rating in a research report on Thursday, October 18th. Barclays decreased their price objective on shares of Canadian National Railway from $80.00 to $77.00 and set an equal weight rating on the stock in a research report on Wednesday, July 25th. Stifel Nicolaus set a $83.00 price objective on shares of Canadian National Railway and gave the company a hold rating in a research report on Tuesday, July 24th. ValuEngine cut shares of Canadian National Railway from a buy rating to a hold rating in a research report on Thursday, August 2nd. Finally, Credit Suisse Group boosted their price objective on shares of Canadian National Railway from $85.00 to $89.00 and gave the company a neutral rating in a research report on Wednesday, July 25th. Twelve analysts have rated the stock with a hold rating and eight have assigned a buy rating to the company’s stock. The stock has an average rating of Hold and a consensus price target of $91.53.

Shares of NYSE:CNI opened at $86.27 on Friday. The firm has a market capitalization of $62.54 billion, a P/E ratio of 22.47, a price-to-earnings-growth ratio of 2.20 and a beta of 0.97. Canadian National Railway has a 52 week low of $70.59 and a 52 week high of $91.90. The company has a debt-to-equity ratio of 0.57, a quick ratio of 0.58 and a current ratio of 0.72.

Canadian National Railway (NYSE:CNI) (TSE:CNR) last issued its earnings results on Tuesday, October 23rd. The transportation company reported $1.50 EPS for the quarter, topping analysts’ consensus estimates of $1.12 by $0.38. The company had revenue of $3.69 billion for the quarter, compared to analysts’ expectations of $3.58 billion. Canadian National Railway had a net margin of 42.06% and a return on equity of 22.67%. The firm’s revenue was up 14.5% compared to the same quarter last year. During the same quarter last year, the company earned $1.31 EPS. As a group, equities analysts forecast that Canadian National Railway will post 4.18 earnings per share for the current fiscal year.

The company also recently disclosed a quarterly dividend, which will be paid on Friday, December 28th. Shareholders of record on Friday, December 7th will be given a $0.3477 dividend. This is a boost from Canadian National Railway’s previous quarterly dividend of $0.34. The ex-dividend date is Thursday, December 6th. This represents a $1.39 dividend on an annualized basis and a dividend yield of 1.61%. Canadian National Railway’s payout ratio is presently 35.94%.

Several hedge funds have recently added to or reduced their stakes in the business. Zions Bancorporation bought a new stake in shares of Canadian National Railway during the 3rd quarter valued at about $102,000. Palo Capital Inc. bought a new stake in shares of Canadian National Railway during the 3rd quarter valued at about $114,000. Girard Partners LTD. bought a new stake in shares of Canadian National Railway during the 3rd quarter valued at about $131,000. First Hawaiian Bank bought a new stake in shares of Canadian National Railway during the 3rd quarter valued at about $175,000. Finally, Quad Cities Investment Group LLC bought a new stake in shares of Canadian National Railway during the 2nd quarter valued at about $165,000. Hedge funds and other institutional investors own 53.77% of the company’s stock.

About Canadian National Railway

Canadian National Railway Company engages in rail and related transportation business. The company transports cargo serving exporters, importers, retailers, farmers, and manufacturers. It operates a network of approximately 20,000 route miles of track spans Canada and mid-America connecting the Atlantic, the Pacific, and the Gulf of Mexico.

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