31 October 2017
Railroads
Canadian Rails
irreversible structural advantage over CP. We do not think this is the case. and
expect CNI's multiple to revert closer to its historical 10-year average of 15.5x.
i-
Figure 122: CNI trades well above its historical fwd. PIE Figure 123: CNI trades inline with its U.S. peers but
nearly 10% above CP
24x
22x
20x
18x
16x
11x
14x
12x
rs 10x
1:12 03 TM OS 06 91 OS 99 10 '11 '11 13 'Le IS 16 17
Pr. P/C '12 '13 '14 '15 '16 '17
--CP U.S. Class l's
Sas. tearer Sewc• Dram.* Sent haSsig
On an EV/EBITDA basis, CNI currently trades at 12.2x our NTM EBITDA estimate.
This represents a significant premium to the company's five year historical
average.
I Figure 124: CNI's historical EV/EBITDA trends
13.5x 1
13.0x 1
12.5x 4
12.0x
11.5x /
11.0x 4
to.sx
10.0x
9.5x
9.0x
8.5x
8.0x r -- t - I -. - V -- T .---., -"V.
re
3 3 3 3 In la b 10 P
ea .641 elea. no 0a .6 4. is 4. 6ee a. A i
4
0
Z ..- 2 .1 s'
EV/EBITDA
4
0
2 ,6 2 42
0 .
u- 2 <
— — —5-Yr. Avg.
cy
San DeurscAt &int former
Page 66 Deutsche Bank Securities Inc.
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