Raymond James has upgraded Canadian National Railway from Market Perform to Outperform, highlighting a shift in sentiment driven by improving macro conditions and operational stability. The upgrade follows a solid Q1 where CNI posted a 4% increase in revenue and an 8% jump in earnings, underpinned by record grain shipments and an improved operating ratio of 63.4%.
A major turning point for the firm came with the successful negotiation of a long-term labor agreement, which reduces wage-related uncertainty and ensures workforce continuity. Additionally, the easing of supply chain constraints and rebounding industrial demand across North America has restored momentum to CNIās freight network, particularly in bulk and intermodal sectors. These developments have prompted Raymond James to raise their 12-month target to $162, reflecting growing confidence in the companyās earnings power for the remainder of the year.
š CNIās dividend profile is equally compelling. The stock yields approximately 2.4%, backed by a conservative payout ratio around 50%. With strong free cash flow and a track record of consistent dividend hikes, Canadian National Railway is well-positioned to deliver stable income alongside capital appreciation. Its disciplined capital allocation and infrastructure investments also bolster its long-term appeal to both growth and income-focused investors.