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Here's Why Investors Should Give Canadian National Stock a Miss Now
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Key Takeaways
CNI faces rising costs and weak liquidity, pressuring profitability and stability.
Earnings estimates cut 2.2% for the March quarter of 2026 and 1.4% for 2026 in 60 days.
Operating costs hit $10.8B in 2024, the current ratio stuck below 1, ending 2025 at 0.67.
Canadian National Railway (CNI - Free Report) is grappling with challenges that are 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 2.2% downward in the past 60 days. For 2026, the consensus mark for earnings has been revised 1.4% 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 increased 16% over the past six months compared with the Transportation - Rail industry’s 19.1% rise.
Image Source: Zacks Investment Research
Weak Zacks Rank: CNI currently has a Zacks Rank #4 (Sell).
Bearish Industry Rank: The industry to which Canadian National Railway belongs currently has a Zacks Industry Rank of 195 (out of 243). Such an unfavorable rank places it in the bottom 20% 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.
Headwinds: Canadian National Railway is facing increasing financial pressure as elevated expenses and weak liquidity continue to weigh on its performance. The company’s operating costs rose from $10.27 billion in 2022 to $10.8 billion in 2024, reflecting sustained cost inflation. In the fourth quarter of 2025, expenses remained high at $2.73 billion, indicating limited progress in cost containment. Persistently elevated costs are squeezing profitability and reducing operational efficiency, particularly in a cost-sensitive industry where tight expense management is essential to protect margins.
Compounding these challenges, Canadian National continues to face a weak liquidity position. The company’s current ratio has remained below 1 for several years, signaling insufficient short-term assets to meet its short-term obligations. The ratio declined sharply from 0.84 in 2022 to 0.61 in 2023, before modestly improving to 0.66 in 2024. Liquidity weakened again, falling to 0.60 in the third quarter of 2025, before ending the year at 0.67. Persistently low liquidity levels increase financial risk and may restrict the company’s ability to absorb unexpected expenses or fund strategic growth initiatives.
Allegiant has an expected earnings growth rate of more than 100% for the current year. The company has an encouraging earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters, and met the mark once, delivering an average beat of 23.6%.
Southwest Airlines currently sports a Zacks Rank #1.
LUV has an expected earnings growth rate of more than 100% for the current year. The company has an encouraging earnings surprise history. Its earnings topped the Zacks Consensus Estimate in three of the trailing four quarters, and missed the mark once, delivering an average beat of 253.9%.
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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 that are 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 2.2% downward in the past 60 days. For 2026, the consensus mark for earnings has been revised 1.4% 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 increased 16% over the past six months compared with the Transportation - Rail industry’s 19.1% rise.
Image Source: Zacks Investment Research
Weak Zacks Rank: CNI currently has a Zacks Rank #4 (Sell).
Bearish Industry Rank: The industry to which Canadian National Railway belongs currently has a Zacks Industry Rank of 195 (out of 243). Such an unfavorable rank places it in the bottom 20% 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.
Headwinds: Canadian National Railway is facing increasing financial pressure as elevated expenses and weak liquidity continue to weigh on its performance. The company’s operating costs rose from $10.27 billion in 2022 to $10.8 billion in 2024, reflecting sustained cost inflation. In the fourth quarter of 2025, expenses remained high at $2.73 billion, indicating limited progress in cost containment. Persistently elevated costs are squeezing profitability and reducing operational efficiency, particularly in a cost-sensitive industry where tight expense management is essential to protect margins.
Compounding these challenges, Canadian National continues to face a weak liquidity position. The company’s current ratio has remained below 1 for several years, signaling insufficient short-term assets to meet its short-term obligations. The ratio declined sharply from 0.84 in 2022 to 0.61 in 2023, before modestly improving to 0.66 in 2024. Liquidity weakened again, falling to 0.60 in the third quarter of 2025, before ending the year at 0.67. Persistently low liquidity levels increase financial risk and may restrict the company’s ability to absorb unexpected expenses or fund strategic growth initiatives.
Stocks to Consider
Investors interested in theZacks Transportation sector may consider Allegiant (ALGT - Free Report) and Southwest Airlines (LUV - Free Report) . You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
ALGT currently sports a Zacks Rank #1.
Allegiant has an expected earnings growth rate of more than 100% for the current year. The company has an encouraging earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters, and met the mark once, delivering an average beat of 23.6%.
Southwest Airlines currently sports a Zacks Rank #1.
LUV has an expected earnings growth rate of more than 100% for the current year. The company has an encouraging earnings surprise history. Its earnings topped the Zacks Consensus Estimate in three of the trailing four quarters, and missed the mark once, delivering an average beat of 253.9%.