Back to top

Image: Bigstock

Canadian National (CNI) Stock Drops Yesterday: Here's Why

Read MoreHide Full Article

Shares of Canadian National Railway Company (CNI - Free Report) declined 6.23% on Dec 20, 2021, closing the trading session at $119.38. Per a Bloomberg report, this was the deepest plunge in eight months.

The downside was due to the development that Jim Vena, who was favored to take over from Jean-Jacques Ruest as the railroad’s CEO, dropped out of the race. TCI Management Ltd, one of Canadian National’s stakeholders with more than 5% interest, was looking to get Ruest replaced by Jim Vena.

TCI was not happy with Canadian National’s performance under Ruest. Management’s decision to pursue the Kansas City Southern acquisition, which ultimately did not materialize, also irked TCI. In October 2021, Ruest had announced his decision to retire at the end of January 2022 (or later when his successor is appointed) as the CNI CEO.

Vena’s move to opt out of the race can be now seen as a setback for TCI. Following his withdrawal, Canadian National aims to look for and announce a new CEO in January 2022. Currently, a committee of the railroad’s board is searching for an appropriate candidate to replace Ruest.

Canadian National currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Key Picks

Here are some better-ranked stocks within the broader Transportation sector:

Schneider National (SNDR - Free Report) carries a Zacks Rank #2 (Buy), presently. SNDR’s earnings outperformed the Zacks Consensus Estimate in each of the preceding four quarters, the average being 21%.

Shares of Schneider National have rallied more than 22% so far this year. SNDR gets a boost from its strong Intermodal and Logistics units. The Intermodal segment is benefiting from yield management and increased volumes. The Logistics unit is thriving on the back of favorable market conditions and other factors.

Expeditors International of Washington (EXPD - Free Report) carries a Zacks Rank of 2, presently. EXPD has a stellar surprise history, with its earnings having outperformed the Zacks Consensus Estimate in each of the preceding four quarters, the average being 29.1%.

Shares of Expeditors have soared above 33% so far this year. Increased airfreight revenues aid EXPD amid the coronavirus-ravaged times. The metric surged approximately 54% year over year in the first nine months of 2021. We are also encouraged by EXPD’s measures to reward its shareholders through dividends and buybacks.