Stifel Resumes Canadian National Railway (CNI) at Hold
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Stifel analyst Benjamin Nolan resumes coverage on Canadian National Railway (NYSE: CNI) with a Hold rating and a price target of $118.00.
The analyst commented, "Canadian National is the cheapest of the rail names likely because they are positioned to overpay for Kansas City Southern (assuming they receive regulatory approval). However, given our view for increased volumes of agriculture products, energy, and mineral (relative to peaking intermodal), we believe CNI is well positioned to benefit not only from higher carload volumes but the higher margins that come with premium freight. We do expect the possible addition of KSU should be transformative to the long-term value proposition and competitive position of CNI. Despite a more attractive valuation, we believe with all rail names (including CNI) trading close to 20x P/E and at the highest end of the historical valuation range. Consequently, we are resuming coverage with a Hold rating and our $118 target price is based on shares trading at 21x 2022 EPS."
Shares of Canadian National Railway closed at $104.68 yesterday.
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