CNI Intrinsic Value

CNI

Canadian National Railway Co. – Line-Haul Railroads

Canadian National Railway Company (CN) is a world-class transportation leader and trade-enabler. Essential to the economy, to the customers, and to the communities it serves, CN safely transports more than 300 million tons of natural resources, manufactured products, and finished goods throughout North America every year. As the only railroad connecting Canada's Eastern and Western coasts with the U.S. South through a 19,500-mile rail network, CN and its affiliates have been contributing to community prosperity and sustainable trade since 1919. CN is committed to programs supporting social responsibility and environmental stewardship.

Analysis Results

Intrinsic Value	$167.08
Latest Price	$114.84
Relative Value	31% undervalued

Share results:

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Cash Flow (Billions)

Analysis Parameters

New Ticker

Analysis Details

Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 8.5%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 3.3%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 8.5%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year	Future flow (billion)	Present value (billion)
2023	2.83	2.74
2024	3.07	2.88
2025	3.33	3.02
2026	3.62	3.17
2027	3.92	3.33

Terminal Value

Assuming the company was sold after the projection period at an exit multiple of 30, the terminal value of the company would be 118 billion. This corresponds to a present value of 96.8 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 15.2 billion. Adding in the terminal value gives a total present value of 112 billion.

There are presently 670.0 million outstanding shares, so the intrinsic value per share is 167.08.

Financial Statements

The following data was to determine the past cash flows.

Current Assets	2,370,757,949
Current Cash	241,718,560
Current Liabilities	2,831,349,718
Current Debt	778,952,798
Non-Cash Working Capital (NCWC)	76,642,470
Change in NCWC	95,493,929
EBIT	5,040,716,312
Tax Provision	1,212,277,534
Depreciation and Amortization	1,274,181,067
Capital Expenditure	-2,026,603,780
Unlevered Free Cash Flow	3,157,707,632

Current Assets	2,691,045,792
Current Cash	658,230,115
Current Liabilities	2,450,689,688
Current Debt	399,022,551
Non-Cash Working Capital (NCWC)	-18,851,459
Change in NCWC	-151,477,141
EBIT	4,369,611,133
Tax Provision	1,131,873,026
Depreciation and Amortization	1,255,192,987
Capital Expenditure	-2,270,815,349
Unlevered Free Cash Flow	2,208,257,778

Current Assets	2,434,348,325
Current Cash	446,532,623
Current Liabilities	2,569,328,309
Current Debt	714,138,290
Non-Cash Working Capital (NCWC)	132,625,682
Change in NCWC	-180,852,259
EBIT	4,130,230,572
Tax Provision	770,641,539
Depreciation and Amortization	1,246,995,322
Capital Expenditure	-2,246,788,928
Unlevered Free Cash Flow	2,057,004,068

Current Assets	2,169,052,752
Current Cash	49,052,783
Current Liabilities	3,285,770,017
Current Debt	1,479,247,990
Non-Cash Working Capital (NCWC)	313,477,941
Change in NCWC	206,371,110
EBIT	4,286,753,372
Tax Provision	929,703,529
Depreciation and Amortization	1,197,194,487
Capital Expenditure	-2,962,328,228
Unlevered Free Cash Flow	1,770,202,596

Current Assets	2,001,283,814
Current Cash	195,139,844
Current Liabilities	2,567,629,527
Current Debt	868,592,388
Non-Cash Working Capital (NCWC)	107,106,831
Change in NCWC	-65,588,254
EBIT	4,029,711,141
Tax Provision	993,305,823
Depreciation and Amortization	974,965,612
Capital Expenditure	-2,590,371,389
Unlevered Free Cash Flow	1,388,451,554

Current Assets	1,742,867,463
Current Cash	55,708,092
Current Liabilities	3,169,790,460
Current Debt	1,655,326,175
Non-Cash Working Capital (NCWC)	172,695,086
Change in NCWC	-132,947,415
EBIT	4,423,222,540
Tax Provision	-314,352,807
Depreciation and Amortization	1,019,458,091
Capital Expenditure	-2,127,253,301
Unlevered Free Cash Flow	3,182,479,915

Current Assets	1,563,079,496
Current Cash	130,565,729
Current Liabilities	2,231,487,007
Current Debt	1,104,615,742
Non-Cash Working Capital (NCWC)	305,642,502
Change in NCWC	-14,514,797
EBIT	3,940,711,097
Tax Provision	954,761,894
Depreciation and Amortization	908,767,148
Capital Expenditure	-1,999,287,727
Unlevered Free Cash Flow	1,806,307,914

Current Assets	1,552,474,475
Current Cash	110,324,475
Current Liabilities	2,161,782,850
Current Debt	1,039,790,150
Non-Cash Working Capital (NCWC)	320,157,300
Change in NCWC	13,165,146
EBIT	3,797,180,950
Tax Provision	963,356,200
Depreciation and Amortization	835,004,850
Capital Expenditure	-1,951,228,950
Unlevered Free Cash Flow	1,653,286,183

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