Summary

• Canadian National Railway demonstrates improved operational efficiency, strong free cash flow, and strategic resource-export positioning, but trades at a fair valuation after a significant rally.
• CNI's Q1 showed operational gains—faster cars, longer trains, better network fluidity—yet revenue and adjusted EPS declined, highlighting a disconnect between execution and financial results.
• Resource exports, especially grain and energy, underpin CNI’s long-term growth, with key projects like ACE and Prince Rupert offering upside, but 2026 guidance remains modest.
• I rate CNI a hold: quality operations and network, but the current price reflects much of the operational improvement, leaving limited near-term upside.
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Canadian National Railway (CNI) is a top railway franchise, and we saw their strength in the first quarter earnings. The network is running better, assets are being used more efficiently, CNI is generating free cash flow, and

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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