Canadian National Railway Company

“CN is a genuinely great business — irreplaceable three-coast network, captive shipper pricing power, 50%+ EBITDA margins — but four years of flat EBITDA, declining FCF, collapsing buyback capacity, and structural competitive displacement from CPKC on high-growth corridors cannot support a 22x earnings multiple. The market is pricing in an operational recovery and volume acceleration that has not materialised; at USD 120, expected total returns of 6–7% annually are insufficient compensation for the competitive and execution risks on the table. A 15–20% drawdown to the USD 95–105 range would make CN genuinely attractive; at today's price it is a world-class asset at a world-class price, which is the problem.”