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Canadian National Railway (TSX: CNR) has fallen by 16% in the last 12 months and has recently reached a low -five -year low. Constary investors wonder whether CNR shares are now sold over and good to buy for a self -driven tax -free savings account (TFSA) or registered pension savings plan (RRSP) portfolio aimed at dividends and total returns.
Canadian National Railway Share Prize
Canadian National Railway Trades near $ 130 per share at the time of writing, compared to $ 180 at one point in 2024.
The withdrawal in the past 17 months has surprised some long-term CNR investors who are used to the shares that are kept relatively well by turbulent economic and geopolitical times. In 2024 the pain largely came from labor attacks at CN and important ports that it serves. Moreover, CN had to contend with forest fires in Alberta, who also disrupted the operations. The combination of these problems resulted in CN, which only resulted in a small increase in turnover in 2024, while the profit fell compared to the previous year due to an increase in costs.
The start of 2025 brought some optimism from the company. In the fourth quarter (Q4) 2024 Winst report that was released at the end of January, CN said that it was expected that an adapted diluted Win-P-Share (EPS) growth of 10-15% this year would deliver compared to 2024. The story changed, however, when CN reported the results of Q2 2025. The new guidelines for the year are for adapted diluted EPS growth from central to high single figures while retaining its $ 3.4 billion capital program.
Uncertainty created by the American rates and trade negotiations has a negative influence on CN. Companies postpone non-essential purchases, while rates influence shipments of raw materials and finished goods between the US and Canada. CN operates 20,000 route kilometers of traces that connect ports on the Pacific and Atlantic coast of Canada with the Gulf Coast in the United States.
Risks
The hope for a quick solution for trade negotiations between the United States and Canada ended earlier this month when an American deadline to make a deal succeed and new rates went into place. The longer the uncertainty persists, the greater the chance that the US and Canada can slide into a recession. This would reduce the demand for the services of CN.
Investors must also keep an eye on the recent announcement of the planned purchase of Norfolk Southern from Union Pacific. The deal, if approved by supervisors, would create an American rail giant with 50,000 miles of track that connects the East and West Coast of the United States.
Analysts are still trying to find out how this CN would influence. The deal can lead to the loss of some customers as goods that enter Canadian ports in British Columbia to ports on the west coast of the US. CN currently has a partnership agreements with both Union Pacific and Norfolk Southern. The combination of the two can influence those similarities.
Possibility
The economic and trade risks can already be reflected in the CN stock price, especially now that the company has lowered the guidance for the year. Every news of an extensive trade agreement between the US and China or Canada would probably bring investors back into the shares about the reduced uncertainty.
Regarding the UP-NS deal, a decision of supervisors will probably not come before the end of next year. If it is blocked, the share price of CN can gather. If it gets green light, the net impact may not be that bad. Reduced competition could enable CN to charge higher prices for some routes, and its network, which runs through the US to the North South, should still make contact with a combined UP-NS.
The Bottom Line
Folatility in the short term is expected, but patients’ investors may want to nibble at this level to nibble CN and want to add to the position on further weakness. Buying CN on large pullbacks has traditionally been proven to be a smart move for investors. Investors can get a dividend yield of 2.7%against the current share price. The board has increased the distribution annually in the last 29 years.
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