Canadian National Railway (USA) (NYSE: CNI)'s revenue growth appears challenging over the next several quarters, according to Argus.
Argus analyst John Eade downgraded shares of Canadian National Railway from Buy to Hold.
Canadian National, though a well-managed firm with industry-high profitability, is likely to suffer from challenges to revenue growth over the next several quarters, as product mix skewed toward weaker categories such as autos, Eade said in a Friday morning note.
The railway's long-term shareholder return record is unimpressive relative to peers, the analyst said, despite the company buying back stock and recently raising its dividend by 10 percent.
The railroad operator recently reported results that were shy of estimates, Eade said.
Better near-term opportunities are available in the rail sector, he said.
"We will look to get the CNI shares back on the BUY list once we see signs of improved revenue growth or if the shares fall back to support near $70."
The Price Action
Canadian National shares have gained about 7.5 percent over the past year.
Over the past three months, the shares have lost 4 percent versus a 5.4-percent advance by the S&P 500 Index.
Canadian National was trading down 1.21 percent at $75.93 midmorning Friday.
The Worst Performing Rail Stock Of 2017: Canadian Pacific
Canadian Pacific To Chug Along On Cash, Crude Catalysts; Goldman Sachs Upgrades
Latest Ratings for CNI
|Feb 2018||Deutsche Bank||Maintains||Sell||Sell|
|Jan 2018||Credit Suisse||Maintains||Neutral||Neutral|
View More Analyst Ratings for CNI
View the Latest Analyst Ratings
See more from Benzinga
- Foundation Medicine Set For 'Material Upside,' Cowen Says In Bullish Initiation
- Box Inc Is A Buy On Sustained Growth, Favorable Competitive Trends, Says DA Davidson
- Jefferies Upgrades Salesforce.com On Strong Customer Demand
© 2018 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.