In all likelihood, this will serve as your dose of unexpected news for today. Canadian National Railways (CNI) is facing a potential work stoppage that could grind freight train service across Canada to a halt as early as Thursday. Despite this, shares are up fractionally in Monday afternoon’s trading.
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Almost 9,000 Canadian National employees are looking at either a strike date or a lockout date (when employers initiate a work stoppage), a move that the Canadian government declares will be “…borne by all Canadians.” The Teamsters Canada Rail Conference has, at last report, issued a 72-hour strike notice, and unless there is a last-minute agreement, employees will be off the job starting at 12:01 Eastern time this Thursday.
CN Rail, meanwhile, has gone proactive with this development, and noted that it would actively lock out workers at that time unless an agreement is reached. Thus, this Thursday is either a strike date or a lockout date. And, given that “…no meaningful progress” emerged from negotiations over the weekend, it is beginning to look like a work stoppage is ahead.
The Two Parties Are Very Far Apart
Further word suggests that the two parties are “…very far apart” in terms of an actual agreement. Further, both sides are accusing each other of “bad faith” in the actual talks, which suggests little likelihood of reconciliation and advancement.
But CN Rail has been anticipating this and has already been seen halting shipments ahead of what seems increasingly likely to be a strike. The union is deeply concerned about CN’s plans to “…gut the collective agreement of all safety-critical fatigue provisions,” which suggests longer hours or possibly less pay. Meanwhile, CN Rail asserts its planned agreements “…fully comply…with new regulatory requirements and do…not in any way compromise safety.”
Is Canadian National Railway a Good Stock to Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on Canadian National Railways stock based on seven Buys, 13 Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. After a 3.01% rally in its share price over the past year, the average CNI price target of $133.20 per share implies 17.46% upside potential.
