UNP - Canadian National: Easing Comps Growth Initiatives And Reasonable Valuation

2024-07-02 14:14:28 ET

Summary

• Canadian National Railway Company is expected to see growth acceleration, with revenue benefiting from easing Y/Y comparisons and company-specific initiatives.
• Margins to benefit from operating leverage, network optimization, and pricing increases offsetting wage inflation.
• Stock trading discounted to historical averages, with potential for re-rating as volume recovers and wage negotiations complete.

Investment Thesis

Canadian National Railway Company ( CNI ) should see a meaningful acceleration in growth moving ahead. The company's revenue growth should benefit from easing Y/Y comparisons in the coming quarters. Further, company-specific initiatives like the West Coast expansion project and strategic partnerships should also contribute to revenue growth. The pricing outlook also remains positive, with the company continuing to implement price increases above inflation....

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