Zacks Investment Research downgraded shares of Canadian National Railway Company-ADS (CNI) (CNI) from NEUTRAL to UNDERPERFORM on February 25, 2014, with a target price of $51.00.
We have downgraded our recommendation on Canadian National Railway to Underperform. We are concerned about the company's near-term prospects due to continuous weakness in the Coal segment. Lower Coal shipments particularly for export continue to be a headwind for the company. Further, high inventories and substitution of cheaper natural gas continue to impact coal volumes. A harsh winter is also expected to affect the company's first quarter performance. Higher expenses, competitive pressure and slow recovery in global economy could also be deterrents. Meanwhile, the stock is presently trading near its 52-week high range and we believe most of the positives have been priced in thus providing limited upside potential for investors.
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