Bernstein SocGen Group Downgrades Canadian National Railway (CNI) to Market Perform

Bernstein SocGen Group analyst David Vernon downgraded Canadian National Railway (NYSE: CNI) from Outperform to Market Perform with a price target of $130.67 (from $146.25).

The analyst said: "We’re moving to the sidelines on CN, mostly due to shorter-term concerns, but also because the earnings ramp from 2024 to 2025/26 is getting steeper. The company is facing cost pressure on below consensus volume in 2Q, and could see bookaway from Prince Rupert in 3Q due to strike risk, making it likely that the company will need to back down expectations for 10% FY24 EPS growth. We still like the longer-term growth story, and the stock is arguably inexpensive at a ~19x P/E multiple, but we’re moving to the sidelines until we can see a better catalyst path that would support a re-rating of the shares. We’re elongating the recovery, so NTM+1 goes down despite rolling the model forward (reflecting our slightly diminished confidence in the bounce back for CN)."

For an analyst ratings summary and ratings history on Canadian National Railway click here. For more ratings news on Canadian National Railway click here.

Shares of Canadian National Railway closed at $117.92 yesterday.

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