Stephens on Monday lowered its price objective on Canadian National Railway (NYSE: CNI) to $100.00 from $105.00 and left the stock at an Equal Weight rating. The new target sits modestly above the prevailing share price of $96.22, even as the stock trades close to its 52-week low of $90.74.
The analyst action followed Canadian National’s fourth-quarter 2025 financial disclosure. Adjusted earnings per share for the quarter came in at C$2.08, ahead of Stephens’ estimate of C$1.97 and the consensus view of C$1.98. The company’s adjusted operating ratio was reported at 60.1%, stronger than the forecasts of 61.9% and 61.4%. Additional company metrics show robust profitability, with InvestingPro data recording gross profit margins of 56.47%.
Despite the quarter’s outperformance on several measures, Canadian National issued guidance for fiscal 2026 that points to roughly flat revenue ton miles year-over-year. Management expects adjusted EPS to grow slightly faster than revenue ton miles, but that guidance, combined with Stephens’ outlook, implies subdued volume trends through the year.
Analysts are projecting modest revenue growth of about 2% for FY2026. At the same time, 10 analysts have reduced their earnings forecasts for the period. Stephens attributed its more cautious stance to economic uncertainty and trade policy risks that could weigh on freight volumes. The firm also flagged year-over-year expense pressures that will constrain improvements in the operating ratio and limit the potential for adjusted EPS expansion.
Stephens described Canadian National’s valuation as "very attractive," but said it does not see an imminent catalyst that would prompt upward revisions to estimates in the near to medium term. The firm concluded the stock’s risk/reward looks "fairly balanced" at current levels.
Market metrics underscore the stock’s stability relative to the broader market. Canadian National sits in the Ground Transportation sector with a reported beta of 0.89, indicating lower volatility versus the market benchmark. InvestingPro analysis further suggests the shares may be modestly undervalued on a Fair Value basis; the stock is trading at a price-to-earnings ratio of 17.3.
Investors also note Canadian National’s long track record of shareholder returns through consistent dividends. The company has paid dividends for 31 consecutive years and its current yield stands at 2.67%.
Separate reporting on the company’s results highlights that Q4 2025 earnings per share climbed 14% year-over-year, while full-year EPS rose 7%. Those gains reflect solid financial performance in the quarter and across the year, even as the company navigates a challenging macroeconomic backdrop. Management and analysts are watching near-term volume trends closely: the firm faces flat volume expectations for 2026 and ongoing impacts from tariffs that could influence freight activity.
Market response to the earnings release was mixed, with premarket trading suggesting a muted reception despite the beat on several metrics. For investors seeking deeper analysis, a Pro Research Report covering Canadian National and more than 1,400 U.S. equities is available through InvestingPro.
Contextual note: The balance between the company’s strong margins and the constrained volume outlook underpins Stephens’ decision to lower its target while maintaining a neutral rating. The interplay of macro and trade-policy risks with year-over-year expense dynamics will be key variables for CNI’s performance through fiscal 2026.