CNI Joins Operating Units - Analyst Blog

A generic image of a pen next to a pile of coins
Credit: Shutterstock photo

To enhance its operating efficiency, Canadian National Railway Company (CNI), which operates the largest rail network in Canada and the only transcontinental network in North America merged three of its operational units - Elgin, Joliet and Eastern Railway Company into its Wisconsin Central Ltd. (WC) subsidiary.

Canadian National remains highly optimistic about the merger as it will certainly boost its performance going forward.

Canadian National expects strong demand across all its businesses with improvement in wholesale and retail markets supporting high business volumes for the company. Based on which, in 2012, the company had planned to invest C$1.8 billion to upgrade its railway infrastructure project. So, opening of offices across the Southeast Asian countries is also a part of its aggressive growth plan.

Despite the slowing economy and stiff competition from Canadian Pacific Railway ( CP ), we believe the improving operating efficiency along with expansion growth in key markets will help the company achieve strong financial results in the forthcoming quarters. This has underpinned mid-single digit carload growth and approximately 10% earnings growth in 2012. Management continues to expect a sustainable operating ratio, given stronger volume growth at low incremental cost with productivity initiatives like improving system velocity and fuel efficiency.

Currently, Canadian National Railway has a Zacks #4 Rank, implying a short-term Sell rating on the stock. For the long term, however, we maintain our Neutral recommendation on the stock.

Based in Montreal, Canada, Canadian National Railway Company is engaged in the rail and related transportation business.

CDN NATL RY CO (CNI): Free Stock Analysis Report

CDN PAC RLWY (CP): Free Stock Analysis Report

To read this article on click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story


Other Topics


Latest Markets Videos


    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at

    Learn More