CHENG FENG CHIANG
Bank of America lifted its rating on Canadian National Railway Company (NYSE:CNI) to Buy from Neutral. The firm pointed to volume growth that is trending above expectations and said the grain crop may not be as bad as originally feared.
BofA set a price objective for Canadian National Railway (CNI) of $145 on its view that the rails giant is on track to achieve its near-term double-digit earnings growth target. The price objective works out to 24.0X BofA’s 2024 EPS estimate and is 21.5X the 2025 EPS estimate.
Despite the overall rosy view on CNI, analyst Ken Hoexter warned of near-term risk on CNI due to the potential risk of a strike in May by the Canadian Engineers and Conductors. Hoexter thinks that a negative reaction to that development could provide investors with a good entry point. Bank of America is bullish overall on the rails sector and has Union Pacific (UNP) slotted as its top pick.
Shares of Canadian National Railway Company (CNI) edged 0.85% higher in premarket trading on Wednesday to $132.01 vs. the 52-0week trading range of $103.96 to $134.02. The dividend yield for new buyers of the stock is 1.82%. The Seeking Alpha Quant Rating on CNI is flashing Buy, with a strong factor grade for profitability standing out.
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