Stock Analysis

The Canadian National Railway Company (TSE:CNR) Third-Quarter Results Are Out And Analysts Have Published New Forecasts

TSX:CNR
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The third-quarter results for Canadian National Railway Company (TSE:CNR) were released last week, making it a good time to revisit its performance. Canadian National Railway reported in line with analyst predictions, delivering revenues of CA$4.1b and statutory earnings per share of CA$1.72, suggesting the business is executing well and in line with its plan. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Canadian National Railway

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TSX:CNR Earnings and Revenue Growth October 26th 2024

Taking into account the latest results, the current consensus from Canadian National Railway's 28 analysts is for revenues of CA$18.3b in 2025. This would reflect a credible 6.4% increase on its revenue over the past 12 months. Statutory earnings per share are forecast to shrink 3.9% to CA$8.30 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of CA$18.3b and earnings per share (EPS) of CA$8.40 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

The analysts reconfirmed their price target of CA$173, showing that the business is executing well and in line with expectations. 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$200 per share, while the most bearish prices it at CA$158. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Canadian National Railway is an easy business to forecast or the the analysts are all using similar assumptions.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We can infer from the latest estimates that forecasts expect a continuation of Canadian National Railway'shistorical trends, as the 5.1% annualised revenue growth to the end of 2025 is roughly in line with the 4.6% annual growth over the past five years. Compare this with the broader industry (in aggregate), which analyst estimates suggest will see revenues grow 7.7% annually. So it's pretty clear that Canadian National Railway is expected to grow slower than similar companies in the same industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at CA$173, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Canadian National Railway going out to 2026, and you can see them free on our platform here..

You still need to take note of risks, for example - Canadian National Railway has 1 warning sign we think you should be aware of.

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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.