Beat and Raise Shows New Era Traction

Research evidence excerpt

Beat and Raise Shows New Era Traction

Idea

July 27, 2026 06:00 AM GMT

Morgan Stanley & Co. LLCMCanadian National Railway Co. | North America Ravi Shanker

Equity Analyst

Beat and Raise Shows New Era Ravi.Shanker@morganstanley.comMadison J Pasterchick +1 212 761-6350

Research Associate

Madison.Pasterchick@morganstanley.com +1 212 761-3787

Traction Nancy Hipp

What’s Changed Nancy.Hipp@morganstanley.com +1 212 761-1311

Canadian National Railway Co. (CNR.TO) From To Canadian National Railway Co. (CNR.TO, CNR CT)

Price Target C$200.00 C$205.00

Freight Transportation | United States of America

Stock Rating Overweight

Industry View In-Line AlphaSignals Earnings Reaction

Price target C$205.00

Unchanged Modest upside Modest revision higher Shr price, close (Jul 23, 2026) C$183.92

Impact to our thesis Financial results versus consensus Direction of next 12-month Mkt cap, curr (mm) C$114,706

consensus EPS 52-Week Range C$184.83-126.11

Source: Company data, Morgan Stanley Research

Last fall, the market was enthused by CNR’s reset on targets,

messaging and capex, and today’s beat and raise is the first real

sign of the new plan in action. With fewer distractions and the

best risk-reward in our covered group, CNR still looks like the

best Rail value.

Key Takeaways

CNR delivered the biggest clean Rail beat of the season, with EBIT ~6% above

MS/consensus.

Raised guidance signals management is becoming more constructive on the cycle,

despite still-conservative assumptions.

Guidance leaves room for additional earnings upgrades, with fuel and FX

providing incremental support into 2H/2027.

Canadian Rails continue to offer the strongest structural growth outlook,

supported by Ag, Merchandise, and future international intermodal recovery.