Canadian National Railway combines an irreplaceable three-coast freight moat, raised 2026 guidance, and a probability-weighted five-year target of $167.04.
Overview
Canadian National Railway is a premier Class I railroad operating nearly 20,000 route miles and uniquely connecting North America’s Atlantic, Pacific, and Gulf coasts. Its freight-only model spans intermodal, petroleum and chemicals, grain and fertilizers, forest products, metals and minerals, automotive, and coal, creating diversified exposure to continental trade. **The company’s three-coast network, port access, captive shipper infrastructure, and rail’s up-to-four-times fuel efficiency form a durable competitive moat.** Q2 2026 revenue rose 11% year over year to C$4,753 million, adjusted diluted EPS increased 11% to C$2.08, and RTMs grew 5%, prompting management to raise full-year guidance to low single-digit RTM growth and mid-to-high single-digit adjusted EPS growth. Valuation is premium but supported by a 38.4% operating margin, 27.2% net margin, 21.9% ROE, and C$3.6 billion of trailing free cash flow; shares trade at 22.8x trailing P/E and 21.8x forward P/E. Near-term catalysts include Jansen potash volumes, the Union Pacific corridor, buybacks, and continued Fast Track savings. The stock’s $130.58 price is near its $131.50 52-week high, while the probability-weighted five-year target is $167.04.