01:32 PM EDT, 10/29/2024 (MT Newswires) -- Volume guidance was in focus at the Canadian rails during third quarter reporting, notes RBC.

At CN, management reaffirmed 2024 guidance for (implied) RTM growth of +3%, and RTM growth in the fourth quarter of ~3.5%. Given QTD trends (RTMs-2.4%), an area of focus was whether CN could make up the difference during the remainder of the quarter.

"Our view is that CN management likely has good visibility into carload trends during the remainder of the year and we flag easy Grain comps, which should drive growth looking ahead," RBC said.

However, RBC sees risk to the downside to its fourth quarter growth estimate of +4.4% (cons. +2.6%) and will be monitoring volumes trends in the coming weeks.

CPKC increased its 2024 volume guidance to up MSD (from LSD). "While the company's guidance increase was largely expected with volumes trending up +3.8% YTD, we nevertheless highlight the guide was in stark contrast to peers, which flagged industrial headwinds and risk to the near-term volume outlook."

RBC sees CPKC's idiosyncratic growth opportunities as a key long-term differentiator, and when combined with an expected 500bp improvement in O/R in Q4 q/q, as a driver of significant operating leverage.

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