CN Beats on Revenue as Stock Rallies into Earnings

The borrow market is as undemanding as it gets for a large-cap rail. Availability is extraordinarily loose — borrow utilisation has been below 0.5% throughout April, a fraction of the 52-week peak of 13.5% seen earlier in the year. Short interest amounts to just 0.58% of the free float, and the cost to borrow has fallen sharply, now at 0.51% APR versus roughly 1.8% as recently as mid-April. That 60% month-on-month decline in CTB is notable not because the borrow is stressed in any direction, but because it illustrates how thoroughly short sellers have stepped back. Days to cover is 1.86. The ORTEX short score of 27.6 ranks in the 85th percentile of its sector — meaning relative to peers, CN carries less short-selling pressure than most. None of this signals any squeeze setup; it simply reflects a stock that institutions own and bears have largely left alone.

The Street's current read is nearly neutral on price. The mean analyst price target of CAD 157.90 sits almost exactly at yesterday's close of CAD 157.36 — implying zero forward return at consensus. That the stock has rallied sharply to meet this target adds nuance to the picture. The trailing P/E is 19.3x, up almost 1.8 turns over 30 days as the price ran. At 4.5x book, the stock is not cheap by historical rail standards. EV/EBITDA at 13.1x has been broadly stable. Factor scores are mixed: the dividend score is strong at 79th percentile, supported by a CAD 0.915 quarterly dividend declared in January. EPS momentum sits in the mid-50s percentile — decent but not exceptional — while the 12-month forward EPS growth estimate ranks only in the 36th percentile, reflecting the marginal year-on-year decline in Q1 results.

Institutional ownership tells the story of a stock held by everyone. Vanguard leads with 4.0% of shares, broadly steady. Fidelity International added over 5.2 million shares in its most recent filing, a notable addition. TCI Fund Management, a long-term activist holder in CN, trimmed by roughly 8.9 million shares to 1.6% — the most significant registered change in the top-holder list. That drawdown from a high-conviction fund is worth watching in the context of the stock reaching fair value on the Street's current targets.

On the insider side, the most recent open-market purchases came from Chairman Shauneen Bruder (620 shares at CAD 141.07 in late March) and independent director Albert Monaco (7,400 shares at CAD 135.68 on March 20). Both trades were executed well below current levels, a supportive signal now that the stock has moved 10-15% above their entry prices. Net insider activity over 90 days is a modest positive — roughly CAD 1.0 million in net purchases — though these are small relative to a company of this scale and should be read as directional rather than material.

What to watch next: the May 1 earnings call is the near-term focus, and with revenue nudging above estimates and EPS essentially flat year-on-year, the conversation is likely to centre on volume guidance for the back half of the year and management's read on the trade-tariff environment — CN's cross-border exposure between Canada and the US makes it a bellwether for North American goods flows.