Published on 18 Dec 2023 on Simply Wall St. via Yahoo Finance

Canadian National Railway Company's (TSE:CNR) Shares May Have Run Too Fast Too Soon

With a price-to-earnings (or "P/E") ratio of 21.2x Canadian National Railway Company (TSE:CNR) may be sending very bearish signals at the moment, given that almost half of all companies in Canada have P/E ratios under 12x and even P/E's lower than 5x are not unusual. Nonetheless, we'd need to dig a little deeper to determine if there is a rational basis for the highly elevated P/E.

Canadian National Railway certainly has been doing a good job lately as its earnings growth has been positive while most other companies have been seeing their earnings go backwards. The P/E is probably high because investors think the company will continue to navigate the broader market headwinds better than most. If not, then existing shareholders might be a little nervous about the viability of the share price.

View our latest analysis for Canadian National Railway