UPDATE: BMO Capital Markets Upgrades CN Railway on Accelerated Volume Growth

In a report published on Thursday, BMO Capital Markets analyst Fadi Chamoun Upgraded CN Railway (NYSE: CNI) from Market Perform to Outperform and raised the price target on the company from $108 to $115.

In the report, BMO Capital Markets commented, "We are upgrading CN Rail to Outperform from Market Perform and raising our target price to $115 from $108. Notwithstanding the muted outlook for the company's bulk segment in H2/13 (coal, fertilizers, grain), we project volume growth to accelerate in the coming quarters supported by an expected ramp-up of crude on rail shipments and continued strong growth in the intermodal and merchandise (chemicals & petroleum ex. crude; forest products, autos, metals, etc.) segments. Cost inflation is tracking above historical levels of 0.7% primarily due to higher pension expenses, but is expected to moderate in 2014. CN Rail has a significant runway to grow at low incremental costs and ongoing investments in the Edmonton-Winnipeg corridor should improve network resiliency and drive productivity gains going forward."

CN Railway closed on Thursday at $100.14