Canadian National Railway Company Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

Last week, you might have seen that Canadian National Railway Company (TSE:CNR) released its quarterly result to the market. The early response was not positive, with shares down 5.0% to CA$160 in the past week. It looks like the results were a bit of a negative overall. While revenues of CA$4.3b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 9.4% to hit CA$1.75 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Canadian National Railway

Taking into account the latest results, the current consensus from Canadian National Railway's 29 analysts is for revenues of CA$17.6b in 2024. This would reflect a satisfactory 3.2% increase on its revenue over the past 12 months. Statutory earnings per share are expected to decline 11% to CA$7.70 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of CA$17.8b and earnings per share (EPS) of CA$7.94 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

It might be a surprise to learn that the consensus price target was broadly unchanged at CA$180, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Canadian National Railway at CA$210 per share, while the most bearish prices it at CA$158. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Canadian National Railway's past performance and to peers in the same industry. The analysts are definitely expecting Canadian National Railway's growth to accelerate, with the forecast 6.5% annualised growth to the end of 2024 ranking favourably alongside historical growth of 4.3% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 7.6% annually. Canadian National Railway is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at CA$180, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Canadian National Railway going out to 2026, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Canadian National Railway , and understanding this should be part of your investment process.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com