Canadian National Railway stock price
Canadian National Railway is trading near $137 per share at the time of writing, up from $177 at this time in 2024.
The prolonged share price decline is mainly attributed to a series of external challenges. Port labor strikes and forest fires disrupted operations in 2024. These events drove up costs, reduced operational efficiency and forced some customers to find alternatives to move their freight.
In 2025, the story was about trade uncertainty. This theme is expected to continue at least into the first half of 2026. CN had to lower its expectations last year when it became clear that there would be no trade deal between the United States and Canada before the end of the year. Ideally, there would have been early movement in sector-specific tariffs on aluminum, steel and forestry products. These issues will now be rolled into the broader negotiations on the Canada-U.S.-Mexico Agreement (CUSMA). The three countries must agree on an extension in July or come up with new agreements.
Investors should prepare for a bumpy ride.
Income
CN recently announced its full year 2025 results. Revenue increased 2% to $17.3 billion compared to 2024. Adjusted diluted earnings per share (EPS) increased 7%. That compares with the original 2025 guidance for adjusted EPS growth of 10% to 15%, so the impact of trade uncertainty on the business was meaningful. In fact, CN said the negative impact of tariffs on revenue last year was about $350 million.
The company achieved an operating ratio improvement of 1.2% in 2025. Free cash flow increased by 8%.
CN took advantage of the low stock price to buy back 15 million shares, spending about $2 billion on the purchases.
Looking ahead, CN has issued cautious guidance for 2026, citing continued uncertainty around trade negotiations and tariffs. Adjusted earnings per share are expected to increase only marginally, but the company will continue to generate strong free cash flow.
The board has announced a 3% dividend increase and CN plans to buy back up to 24 million shares over the next twelve months. A reduction in the capital program compared to 2025 will result in more excess cash.
CN has now increased its dividend for 30 years in a row.
Risks
Continued trade uncertainty will be a headwind for the company. Companies will wait to make major financial commitments until there is clarity on tariffs for products moving between Canada and the United States. CN’s extensive rail network covers nearly 20,000 route miles, connecting ports on Canada’s Atlantic and Pacific coasts to the Gulf Coast in the United States.
A proposed merger between Union Pacific and Norfolk Southern in the United States is another potential threat. If the deal is approved, it would create an American east-west rail giant. Analysts are trying to figure out what impact the combined operations will ultimately have on the overall rail industry. CN could lose some revenue depending on prices and the routes customers prefer to use to move their freight.
Possibility
Any news of a trade deal between the United States and Canada would likely give CN a good boost. In the meantime, Canada is working hard to secure new trade agreements with other countries that could potentially drive higher long-term freight volumes along CN’s domestic network.
Despite the headwinds, CN remains highly profitable and continues to return cash to shareholders.
The bottom line
Short-term volatility is expected, but most of the uncertainty is likely already factored into the share price. Buying CN on major pullbacks has historically proven to be a profitable decision for patient investors. If you have a contrarian investing style, CN deserves to be on your radar for a buy-and-hold portfolio.
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