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Things were looking pretty good for the railroad industry heading into earnings season. The global economy seems to be picking up steam, and the industry has a great rank too.

However, many companies haven’t seen great price action in the aftermath of their reports, while several have just managed to meet expectations. But is this just a temporary setback or should railroad investors be worried about these trends? Well, if you are looking at Canadian National Railway ((CNI - Free Report) ), the near-term could actually be pretty promising, and especially if we look to recent earnings estimates.

Estimates and the Recent Report

In CNI’s most recent report, the company just met expectations of $1/share in profits, though revenues did beat expectations. And while initial reaction to the release wasn’t inspiring—despite solid year-over-year numbers—analysts seem pretty upbeat on the company’s prospects.

This is evident by looking to recent analyst estimate changes, including six increases in the past week to the current quarter estimate compared to zero lower, and then eight estimates higher compared to one lower for the current year projections.

We have also seen a sizable increase in the consensus estimate thanks to these moves, including a roughly 6.9% increase to the full year figures, and an 8% increase to the following year EPS projections.

In other words, things are looking pretty promising from an earnings projection view, and there is near universal agreement among analysts regarding this topic. No wonder the stock has earned itself a Zacks Rank #1 (Strong Buy) and why we are looking for solid performance from this name in the near future.

Bottom Line

CNI may not have had the best reaction to earnings, but the company has nice fundamentals right now. Not only is the earnings estimate picture improving, but the market is tilting back towards cyclical stocks as well.

If these trends continue, it could bode well for CNI and the rest of the rail industry in the near term. So, don’t worry too much about the recent sluggish trading in this market, the outlook remains pretty good for Canadian National Railway and there is plenty of room for this stock to return to prominence as the year goes on.

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