We came across a bullish thesis on Canadian National Railway Company on Roche Capital’s Substack by Pedro Ortiz. In this article, we will summarize the bulls’ thesis on CNI. Canadian National Railway Company’s share was trading at $110.79 as of March 4th. CNI’s trailing and forward P/E were 20.08 and 19.16 respectively according to Yahoo Finance.
Canadian National Railway Company, together with its subsidiaries, engages in the rail, intermodal, trucking, and related transportation businesses in Canada and the United States. CNR delivered resilient performance in 2025 despite a challenging macro and regulatory environment, reinforcing its reputation as a high-quality railway with strong operational discipline.
Revenue increased 2% to CAD 17.3 billion while revenue ton-miles grew 1%, reflecting modest demand growth. Adjusted operating income rose 5% to CAD 6.6 billion, improving the operating ratio to 61.7%, demonstrating meaningful productivity gains despite nearly flat volumes.
Adjusted net income reached CAD 4.76 billion with adjusted EPS rising 7% to CAD 7.63, while return on invested capital remained stable at roughly 13%. Fourth-quarter results highlighted stronger momentum entering 2026, with revenue increasing 2%, operating profit rising 9%, and the operating ratio improving to 60.1%, supported by higher train productivity, improved asset utilization, and better fuel and maintenance efficiency.
Operational execution remained a key driver of performance, as the company improved labor productivity, increased locomotive availability to more than 92%, and completed eight infrastructure capacity projects, including expanding the Edson Sub corridor to 63% double-track. These investments strengthen long-term scalability by enabling future volume growth with limited incremental capital.
However, the commercial environment remains mixed. Grain shipments reached record levels, while intermodal and oil and chemical volumes performed well. In contrast, forest products and metals and minerals experienced weakness due to tariffs, lower iron ore production, and reduced drilling activity, with trade tensions contributing to an estimated CAD 350 million revenue impact in 2025.
Canadian National Railway generated CAD 3.34 billion in free cash flow and continues to emphasize shareholder returns through dividends and buybacks, repurchasing roughly CAD 2 billion in shares during 2025. While management expects flat volumes in 2026 and only modest EPS growth due to tariffs and mix headwinds, the company’s strong asset base, disciplined cost structure, and improving efficiency position it to deliver significant earnings leverage once volume growth normalizes, supporting a constructive long-term outlook.
Previously, we covered a bullish thesis on Canadian National Railway Company (CNI) by Max Dividends in May 2025, which highlighted the company’s wide-moat railroad network, resilient freight demand, and long history of dividend growth despite tariff pressures. CNI’s stock price has appreciated by approximately 14.43% since our coverage. Pedro Ortiz shares a similar view but emphasizes operational efficiency improvements and productivity gains supporting long-term earnings leverage.
Canadian National Railway Company is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 47 hedge fund portfolios held CNI at the end of the fourth quarter which was 34 in the previous quarter. While we acknowledge the risk and potential of CNI as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CNI and that has 10,000% upside potential, check out our report about this cheapest AI stock.
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