RBC Capital Markets on Tuesday published survey results on the 2025 earnings expectations for Canadian rail companies amid the threat from the U.S. of 25% tariffs on Canada and Mexico.

According to the results, roughly half of investors expect Canadian National Railway (CNR.TO) to book about 10% of EPS growth, compared to the consensus forecast of 12%.

Canadian National Railway's management has typically been conservative when providing its initial guidance, RBC said, adding that it would therefore view guidance in this range as "neutral to sentiment." However, the bank sees upside to consensus numbers on the back of "easy compares" against a 2024 that was impacted by several one off items.

For Canadian Pacific Kansas City (CP.TO), over half of investors expect management to provide 2025 EPS guidance of mid -teen versus consensus expectations of +17%. This aligns with RBC's expectations for Canadian Pacific to provide official guidance of "double -digit" EPS growth, but then to provide additional color pointing to EPS growth closer to mid to high teens.

Meanwhile, RBC noted Canadian National Railway's car velocity in February has been impacted by tough winter conditions in February, with velocity averaging 165 car miles per day in February versus 200 car miles per day in January.

"We see this as highlighting strong network fluidity in January but tough operating conditions in February," RBC said.

"Key looking ahead will be how quickly the network bounces back from the recent cold snap as we view this as setting the stage for O/R and EPS growth during the remainder of the year, which we see as a potential catalyst for the shares to the extent the company can deliver ahead of expectations (which we expect it will)."

Management expects it will take 10 to 14 days to catch up volume and that underlying demand was "solid", pointing to a strong end to the quarter in our view, RBC said.