CNI
Canadian National Railway Company
$123.51
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 53.0% above fair value
You pay
$123.51
Bear
$64.57
Fair
$80.71
Bull
$96.85
Bear
$64.57
-47.7%
$5.38 × 12x P/E
Fair
$80.71
-34.7%
$5.38 × 15x P/E
Bull
$96.85
-21.6%
$5.38 × 18x P/E
Adjust Assumptions
15.0x
5.38$
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
23.0x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (51 analysts)
$131.75
Divergence from AlphaVal
39%
Summary
Applying a 15x P/E to adjusted EPS of $5.38, the base-case value is $80.71 per share. DDM cross-check: $62.42.
Warnings
Dividend-based valuation: $62.42 (below our primary estimate by 23%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $131.75 (from 51 analysts). Our estimate is 39% below the consensus -- consider that gap carefully.
Financial statements were converted from CAD into USD using USDCAD at 0.7117 USD per CAD.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples