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  5. CNR: Would you comment on the relative minvestmetn merit of our two large railways with or without a successful merger of CP with KC? [Canadian National Railway Company]
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Q: Would you comment on the relative minvestmetn merit of our two large railways with or without a successful merger of CP with KC?

Asked by GEORGE on March 23, 2021
5i Research Answer:

Prior to the KC deal, we would have been largely indifferent between CNR and CP. Both had similar valuations and prospects. We do like the merger potential, but because of arbitrage CP shares could be weak and/or extra volatile for a period of time. IF the deal closes we think CP may have a better growth rate going forward (depending on what CNR might do). But for now, we would lean more to CNR and just let the whole CP/KC situation play itself out first.