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Here's Why Investors Should Give Canadian National Stock a Miss Now
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Key Takeaways
CNI's earnings estimates have been cut for the current quarter and 2025, signaling reduced confidence.
The stock has fallen 18.7% over the past year, as operating expenses stay elevated.
CNI's current ratio has stayed below one for years, underscoring ongoing financial strain.
Canadian National Railway (CNI - Free Report) is grappling with challenges significantly impacting its financial stability. The increased operating expenses and weak liquidity are major headwinds hurting the company’s prospects, making it an unattractive choice for investors’ portfolios.
Let’s delve deeper
CNI: Key Risks to Watch
Southward Earnings Estimate Revision: The Zacks Consensus Estimate for current quarter earnings has been revised 6% downward in the past 60 days. Meanwhile, for 2025, the consensus mark for earnings has been revised 2.7% downward in the same time frame.
The unfavorable estimate revision indicates brokers’ lack of confidence in the stock.
Dim Price Performance: The company’s price trend reveals that its shares have plunged 17% over the past year compared with the Transportation - Rail industry’s 7.6% decline.
Image Source: Zacks Investment Research
Weak Zacks Rank: CNI currently has a Zacks Rank #5(Strong Sell).
Bearish Industry Rank: The industry to which Canadian National Railway belongs currently has a Zacks Industry Rank of 211 (out of 243). Such an unfavorable rank places it in the bottom 13% of Zacks Industries. Studies show that 50% of a stock’s price movement is directly related to the performance of the industry group it belongs to.
A mediocre stock within a strong group is likely to outperform a robust stock in a weak industry. Hence, reckoning the industry’s performance becomes imperative.
Unimpressive Earnings Surprise History: The company’s earnings surprise history is discouraging as it underperformed the Zacks Consensus Estimate in two of the trailing four quarters and beat twice, delivering an average miss of 0.07%.
Headwinds: Canadian National Railway is facing mounting financial pressure as rising expenses and weak liquidity continue to strain its performance. The company's operating costs have consistently remained high, climbing from $10.27 billion in 2022 to $10.8 billion in 2024. These escalating expenses strain profitability and operational efficiency, especially in an industry where cost control is critical to maintaining margins.
Compounding this issue is CNI’s weak liquidity position. The company’s current ratio (a measure of liquidity) has remained below one for several years, indicating it does not have sufficient short-term assets to cover its short-term liabilities. The ratio dropped from 0.84 in 2022 to 0.61 in 2023, and although it slightly improved to 0.66 in 2024, it declined again to 0.60 in the third quarter of 2025. This sustained low liquidity heightens financial risk, potentially limiting CNI’s flexibility to manage unexpected costs or invest in growth opportunities.
EXPD has an expected earnings growth rate of 2.3% for the current year. The company has an encouraging earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average beat of 13.94%.
SKYW currently carries a Zacks Rank #2 (Buy).
SkyWest has an expected earnings growth rate of 33% for the current year. The company has an encouraging earnings surprise history. Its earnings topped the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average beat of 21.24%.
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Here's Why Investors Should Give Canadian National Stock a Miss Now
Key Takeaways
Canadian National Railway (CNI - Free Report) is grappling with challenges significantly impacting its financial stability. The increased operating expenses and weak liquidity are major headwinds hurting the company’s prospects, making it an unattractive choice for investors’ portfolios.
Let’s delve deeper
CNI: Key Risks to Watch
Southward Earnings Estimate Revision: The Zacks Consensus Estimate for current quarter earnings has been revised 6% downward in the past 60 days. Meanwhile, for 2025, the consensus mark for earnings has been revised 2.7% downward in the same time frame.
The unfavorable estimate revision indicates brokers’ lack of confidence in the stock.
Dim Price Performance: The company’s price trend reveals that its shares have plunged 17% over the past year compared with the Transportation - Rail industry’s 7.6% decline.
Image Source: Zacks Investment Research
Weak Zacks Rank: CNI currently has a Zacks Rank #5(Strong Sell).
Bearish Industry Rank: The industry to which Canadian National Railway belongs currently has a Zacks Industry Rank of 211 (out of 243). Such an unfavorable rank places it in the bottom 13% of Zacks Industries. Studies show that 50% of a stock’s price movement is directly related to the performance of the industry group it belongs to.
A mediocre stock within a strong group is likely to outperform a robust stock in a weak industry. Hence, reckoning the industry’s performance becomes imperative.
Unimpressive Earnings Surprise History: The company’s earnings surprise history is discouraging as it underperformed the Zacks Consensus Estimate in two of the trailing four quarters and beat twice, delivering an average miss of 0.07%.
Headwinds: Canadian National Railway is facing mounting financial pressure as rising expenses and weak liquidity continue to strain its performance. The company's operating costs have consistently remained high, climbing from $10.27 billion in 2022 to $10.8 billion in 2024. These escalating expenses strain profitability and operational efficiency, especially in an industry where cost control is critical to maintaining margins.
Compounding this issue is CNI’s weak liquidity position. The company’s current ratio (a measure of liquidity) has remained below one for several years, indicating it does not have sufficient short-term assets to cover its short-term liabilities. The ratio dropped from 0.84 in 2022 to 0.61 in 2023, and although it slightly improved to 0.66 in 2024, it declined again to 0.60 in the third quarter of 2025. This sustained low liquidity heightens financial risk, potentially limiting CNI’s flexibility to manage unexpected costs or invest in growth opportunities.
Stocks to Consider
Investors interested in the Zacks Transportation sector may consider Expeditors International of Washington (EXPD - Free Report) and SkyWest (SKYW - Free Report) .
EXPD currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
EXPD has an expected earnings growth rate of 2.3% for the current year. The company has an encouraging earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average beat of 13.94%.
SKYW currently carries a Zacks Rank #2 (Buy).
SkyWest has an expected earnings growth rate of 33% for the current year. The company has an encouraging earnings surprise history. Its earnings topped the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average beat of 21.24%.