Canadian National Railway (CNI) is seeing strong shipping volumes and improved operations early in the year, but remains cautious about its 2026 outlook, RBC said in a note Wednesday.

The analysts said that the company's rail network is running well, even during the difficult winter season, with trains moving faster after recovering from extreme cold weather. Investments such as increasing double-track coverage on the Edson Subdivision to 65% from 40% have improved efficiency. They added that the company can likely accommodate more growth without major new capital spending, which could boost free cash flow.

Strong service is also helping the company outperform expectations in several areas, including grain, intermodal freight, and potash shipments, the analysts said, adding that management still sees uncertainty for 2026, citing risks such as tariffs, policy uncertainty, and weak industrial demand, so the analysts do not expect the company to raise its guidance soon.

Looking ahead, the analysts see growth opportunities for the company, including shipments from the Jansen Potash Mine expected to open around 2027, increased rail demand from liquefied natural gas projects in northeastern British Columbia, and logistics initiatives tied to Prince Rupert.

RBC has an outperform rating on Canadian National Railway with a price target of 151 Canadian dollars ($111.20).

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