U.S. markets open in 7 hours 58 minutes
  • S&P Futures

    3,930.50
    +8.00 (+0.20%)
     
  • Dow Futures

    32,005.00
    +89.00 (+0.28%)
     
  • Nasdaq Futures

    13,336.50
    +34.50 (+0.26%)
     
  • Russell 2000 Futures

    2,299.40
    +14.30 (+0.63%)
     
  • Crude Oil

    63.37
    +0.15 (+0.24%)
     
  • Gold

    1,794.60
    -3.30 (-0.18%)
     
  • Silver

    28.05
    +0.19 (+0.69%)
     
  • EUR/USD

    1.2183
    +0.0015 (+0.12%)
     
  • 10-Yr Bond

    1.3890
    0.0000 (0.00%)
     
  • Vix

    21.34
    -1.77 (-7.66%)
     
  • GBP/USD

    1.4159
    +0.0018 (+0.13%)
     
  • USD/JPY

    105.9200
    +0.0380 (+0.04%)
     
  • BTC-USD

    50,369.63
    +54.83 (+0.11%)
     
  • CMC Crypto 200

    1,005.37
    +10.70 (+1.08%)
     
  • FTSE 100

    6,658.97
    +33.03 (+0.50%)
     
  • Nikkei 225

    30,168.27
    +496.57 (+1.67%)
     

Canadian National Gains From Grain Movement Amid Low Volumes

  • Oops!
    Something went wrong.
    Please try again later.
Zacks Equity Research
·2 min read
  • Oops!
    Something went wrong.
    Please try again later.

We recently issued an updated report on Canadian National Railway Company CNI.

Canadian National’s overall volumes declined 11% in the first half of 2020 due to double-digit declines in key segments like intermodal and automotive sectors. The company’s third-quarter performance is also likely to reflect substantial volume softness as well.

The company’s first-half 2020 revenues declined 10% year over year primarily due to COVID-19-induced network disruptions. Freight revenues in the Metals and Minerals, Forest Products and Coal segments declined 18%, 12% and 17%, respectively, in the first six months of 2020. Moreover, the same plunged 43% in the Automotive segment. Revenues in the Intermodal segment dropped 6%. Continuous below-par freight revenues in the key segments might hurt the stock badly.

Canadian National Railway Company Price

Canadian National Railway Company Price
Canadian National Railway Company Price

Canadian National Railway Company price | Canadian National Railway Company Quote

Operating ratio (operating expenses as a % of revenues) deteriorated to 70.4% in first-half 2020 from 63.2% in first-half 2019, mainly due to high operating expenses as revenues are weak.

Meanwhile, the company moved 15 million metric tonnes (MMT) of Canadian grain in the first half of the year, thereby bettering its previous record of 13.9 MMT.  Also, Canadian National set a record by moving 8.15MMT of Canadian grain during second-quarter 2020. This is likely to drive the company’s top line.

Zacks Rank & Stocks to Consider

Canadian National currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the Zacks Transportation sector are Knight-Swift Transportation Holdings Inc. KNX, United Parcel Service, Inc. UPS and Werner Enterprises, Inc. WERN. Knight-Swift and United Parcel stocks sport a Zacks Rank # 1 (Strong Buy), while Werner carries a Zacks Rank #2 (Buy).You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term expected earnings per share (three to five years) growth rate for Knight-Swift, United Parcel and Werner is pegged at 15%, 7.7% and 8.5%, respectively.

The Hottest Tech Mega-Trend of All

Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>

 


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Canadian National Railway Company (CNI) : Free Stock Analysis Report
 
United Parcel Service, Inc. (UPS) : Free Stock Analysis Report
 
KnightSwift Transportation Holdings Inc. (KNX) : Free Stock Analysis Report
 
Werner Enterprises, Inc. (WERN) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research