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Canadian National (CNI) Dips to 52-Week Low: Here's Why
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Shares of Canadian National Railway Company (CNI - Free Report) hit a 52-week low of $70.59 during the trading session on Mar 23, before retracing a bit to close at $70.71. The stock has underperformed its industry in a year, having declined 2.6% versus the industry’s 15.9% rally.
Reasons Behind the Price Plunge
Canadian National’s network congestion problems have caused service delays, leading to mass customer dissatisfaction. The company’s operational performance has been hurt from concentration of volume growth and a surge in freight. Moreover, recovery process will take time and matters might only get worse.
The company reported lower-than-expected results in the fourth quarter of 2017. High operating and fuel costs besides weather-related outages hampered the stock’s performance. Notably, Canadian National has an unimpressive earnings history, having outperformed the Zacks Consensus Estimate only once in the last four quarters.
The company’s high-debt levels are another cause for concern. Further, in terms of enterprise value (EV) to EBITDA ratio, Canadian National appears overvalued compared with the market at large. The company has a trailing 12-month EV/EBITDA ratio of 15.3, higher than the S&P 500's 12.1.
The negativity revolving around the stock is further evident from the Zacks Consensus Estimate for first-quarter 2018 being revised 10.5% downward in the last 90 days. Also, the consensus mark for current-year earnings has moved 2.1% south.
The company’s VGM Score of D further highlights its short-term unattractiveness. Here V stands for Value, G for Growth and M for Momentum and the score is a weighted combination of all three scores.
Shares of American Airlines, International Consolidated Airlines and AZUL have rallied more than 22%, 24% and 53%, respectively, in a year.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
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Canadian National (CNI) Dips to 52-Week Low: Here's Why
Shares of Canadian National Railway Company (CNI - Free Report) hit a 52-week low of $70.59 during the trading session on Mar 23, before retracing a bit to close at $70.71. The stock has underperformed its industry in a year, having declined 2.6% versus the industry’s 15.9% rally.
Reasons Behind the Price Plunge
Canadian National’s network congestion problems have caused service delays, leading to mass customer dissatisfaction. The company’s operational performance has been hurt from concentration of volume growth and a surge in freight. Moreover, recovery process will take time and matters might only get worse.
The company reported lower-than-expected results in the fourth quarter of 2017. High operating and fuel costs besides weather-related outages hampered the stock’s performance. Notably, Canadian National has an unimpressive earnings history, having outperformed the Zacks Consensus Estimate only once in the last four quarters.
The company’s high-debt levels are another cause for concern. Further, in terms of enterprise value (EV) to EBITDA ratio, Canadian National appears overvalued compared with the market at large. The company has a trailing 12-month EV/EBITDA ratio of 15.3, higher than the S&P 500's 12.1.
The negativity revolving around the stock is further evident from the Zacks Consensus Estimate for first-quarter 2018 being revised 10.5% downward in the last 90 days. Also, the consensus mark for current-year earnings has moved 2.1% south.
The company’s VGM Score of D further highlights its short-term unattractiveness. Here V stands for Value, G for Growth and M for Momentum and the score is a weighted combination of all three scores.
Zacks Rank & Key Picks
Canadian National carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader Transportation sector are American Airlines Group Inc. (AAL - Free Report) , International Consolidated Airlines Group SA (ICAGY - Free Report) and AZUL SA (AZUL - Free Report) . While International Consolidated Airlines sports a Zacks Rank #1 (Strong Buy), American Airlines and AZUL carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of American Airlines, International Consolidated Airlines and AZUL have rallied more than 22%, 24% and 53%, respectively, in a year.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Click here to see the 5 stocks >>