-- Canadian National Railway (CNI) appears to be outperforming volume growth estimates and gaining market share, BofA Securities said in a note.
The railroad operator's revenue ton miles, a key freight transportation metric, is tracking "well ahead of the company's flat full-year target, aided by gains in record Canadian grain crop and above target intermodal and auto volumes," BofA analyst Ken Hoexter said in the note sent Thursday.
Canadian National is scheduled to release its first-quarter results on April 29.
The company's service metrics are also improving, under Chief Operating Officer Patrick Whitehead, who took charge in October, the brokerage added.
BofA upgraded its rating on Canadian National's stock to buy from neutral and raised the price objective to $122 from $117.
The stock has gained 11% so far this year, with Hoexter pointing to further upside potential.
"While underlying volume fundamentals may decelerate into (the second quarter) given upfront grain moves, we expect negative yields given mix impacts, the loss of carbon tax revenues nearly a year ago, and fuel surcharge lag impacts," Hoexter said.
Price: $110.15, Change: $+0.01, Percent Change: +0.01%