Canadian National Railway Company (TSE:CNR) Just Released Its First-Quarter Earnings: Here's What Analysts Think

Last week, you might have seen that Canadian National Railway Company (TSE:CNR) released its first-quarter result to the market. The early response was not positive, with shares down 2.7% to CA$170 in the past week. Results were roughly in line with estimates, with revenues of CA$4.2b and statutory earnings per share of CA$1.72. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Canadian National Railway after the latest results.

View our latest analysis for Canadian National Railway

Taking into account the latest results, the current consensus from Canadian National Railway's 29 analysts is for revenues of CA$17.8b in 2024. This would reflect an okay 6.3% increase on its revenue over the past 12 months. Statutory earnings per share are expected to decrease 7.6% to CA$8.00 in the same period. In the lead-up to this report, the analysts had been modelling revenues of CA$17.8b and earnings per share (EPS) of CA$8.00 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

The analysts reconfirmed their price target of CA$182, showing that the business is executing well and in line with expectations. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Canadian National Railway analyst has a price target of CA$210 per share, while the most pessimistic values it at CA$155. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Canadian National Railway's rate of growth is expected to accelerate meaningfully, with the forecast 8.5% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 4.0% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 7.7% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Canadian National Railway is expected to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at CA$182, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Canadian National Railway going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 2 warning signs for Canadian National Railway that you need to take into consideration.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.