The latest Market Talks covering the Auto and Transport sector. Published exclusively on Dow Jones Newswires at 4:20 ET, 12:20 ET and 16:50 ET.
1121 ET - CN Rail's strong 2Q and raised EPS guidance for the year suggests consensus is too low. TD Cowen analyst Cherilyn Radbourne says CN Rail beat expectations across revenue, EBIT and EPS, helped by strength in grain, fertilizers and petroleum products. The railroad now calling for mid- to high-single-digit EPS growth on low-single-digit volume gains, compared with consensus 4% outlook. The company has also maintained its network performance, with car velocity flattish, fuel efficiency up by 3%, and gross ton-miles per employee increased 9%. Radbourne says the raised guidance "implies upside to the Street/our forecast," with network performance and fuel efficiency also supporting the improved view.(adriano.marchese@wsj.com)
1020 ET - CN Railway has effectively aligned itself with the proposed Union Pacific-Norfolk Southern merger, with one of its two new agreements taking effect only if the deal is approved. CEO Tracy Robinson tells analysts in a call that commercial and settlement deals give CN direct, competitive access to Kansas City and Mexico, densify parts of its U.S. network, and monetize surplus capacity on the EJ&E line. Robinson says the arrangements "largely address the risk of the proposed merger to CN" while creating new growth opportunities, prompting the railway to formally drop its opposition to the transaction as part of one of the agreements. Robinson adds that the opportunities from the agreements and potential merger-related remedies "improve the position of our railway and create new avenues for growth." (adriano.marchese@wsj.com)
0941 ET - CN Rail delivered a 2Q beat, raising its 2026 outlook, helped by stronger volumes, better yields in key segments and cost controls, according to Citi in a report. The analysts note that adjusted EPS rose 11% to C$2.08, ahead of estimates, and CN Rail lifted its 2026 EPS growth target to mid- to high-single digits on low-single-digit revenue ton-mile growth. Revenue and operating ratio came in better than expected, helped by lower fuel and casualty costs. They say CN Rail "has been benefiting from higher-than-expected volumes driven by Grain, NGLs [natural gas liquids] and refined petroleum products within PetroChems, and Autos." With shares up more than 30% in 2026, the results and outlook should support continued momentum, the analysts say. (adriano.marchese@wsj.com)
0940 ET - Houthi threats in the Red Sea could force some vessels to reroute, increasing shipping costs and complicating logistics, but oil shipping from Yanbu is still expected to reach global markets, says Hamad Hussain from Capital Economics. "It is unlikely that all oil flows from Yanbu port will be choked off from global supply," the commodities economist says. Tankers carrying Saudi crude could still travel north through the Suez Canal, although the longer route would increase transit times and costs while limiting the ability of fully loaded supertankers to pass through. Another uncertainty is whether the blockade applies to all vessels. Some Chinese-flagged tankers have previously passed through the Bab El-Mandeb Strait without incident, raising questions over whether certain ships may continue operating, Hussain says. (giulia.petroni@wsj.com)
0824 ET - European equities are exposed to a clutch of possible negative catalysts, Bank of America analysts write. The Europe-wide Stoxx 600 remains close to record highs, while expectations for European companies' margins are at all-time highs, the analysts say. "Much of the good news is already in the price. This leaves the market vulnerable to disappointment," they say. Potential downside risks include wobbles in the AI trade and continued escalation in the Middle East leading to higher energy prices. Moreover, the prospect of a higher interest-rate environment could prompt further European underperformance. The Stoxx 600 rises 0.5% Friday, and is up 8.5% for the year. (josephmichael.stonor@wsj.com)
0821 ET - CN Rail's operating data shows a network handling more freight and generating higher productivity in 2Q, but also facing rising costs. Gross and revenue ton-miles climbed, indicating stronger volumes, and train length, fuel efficiency and GTMs per average number of employee all rose. At the same time, car velocity fell. Cost pressures are also rising, with operating expenses per GTM rising 9% in the quarter. CN Rail says the quarter's volume strength and operational execution support its decision to lift its 2026 assumption to low single-digit revenue-ton-mile growth. (adriano.marchese@wsj.com)
0504 ET - The latest jump in oil prices following an escalating conflict in the Middle East is likely to be short-lived, Julius Baer's Norbert Rücker says in a note. Despite fresh attacks on tankers in the Red Sea and the Strait of Hormuz, the renewed fighting appears to reflect efforts by the parties to strengthen their bargaining positions ahead of another round of negotiations. "None of the involved conflict parties have an interest in the situation getting out of hand," Rücker says, adding that conditions underpinning the early summer truce are unchanged. With the pledged government oil releases only partially done and global oil overall less depleted than initially expected, the market still has a buffer if supply disruptions persist, Julius Baer says. (jason.chau@wsj.com)
0437 ET - SIA Engineering looks well-placed to benefit from robust demand for its services, driven by factors including its portfolio of partnerships, says OCBC Group Research's Ada Lim. Demand for the aircraft-services provider's maintenance, repair and overhaul businesses remained stable in 1Q despite the Middle East conflict. However, its net profit during the three months ended June 30 fell 6.1% from a year earlier. OCBC lowers its FY 2027 earnings-per-share projection by 4% to account for the weaker-than-expected 1Q performance. OCBC also lowers its fair value estimate to 3.85 Singapore dollars from S$4.00, while maintaining a buy rating on the stock. Shares are down 1.2% at S$3.23. (amanda.lee@wsj.com)
0421 ET - Volkswagen had a solid quarter despite its 4.2% group margin coming in below expectations of 4.7% and operating profit at 3.5 billion euros versus the 3.8 billion euros anticipated, J.P. Morgan analysts write. Net cash flow of 1.2 billion euros is ahead of the expected 600 million euros. Sales revenue this year is now expected to fall up to 3%, largely due to weakness in China. Operating return on sales guidance is unchanged at 4.0%-5.5%. The strength of VW, Porsche and Traton is offsetting the weaker start for Audi, the bank says. "We expect the market to focus on the negotiation of the restructuring measures which may impact the full-year guidance of the group but will sustain strong earnings momentum." Shares in the German automaker fall 0.7%. (dominic.chopping@wsj.com)
0351 ET - The oil market is increasingly focused on the resilience of physical crude flows rather than whether the Strait of Hormuz reopens, Rystad Energy says. While supply disruptions since March have been absorbed through inventory drawdowns, alternative export routes and spare production capacity are diminishing, leaving the market more exposed to prolonged outages. "The direction of prices will ultimately depend on three factors: whether crude flows into Asia can be maintained, whether refiners can adapt to a changing mix of crude grades and how geopolitical developments unfold," says Janiv Shah, VP of commodity markets. Rystad's base case is an interim deal that restores trade but stops short of resolving the nuclear issue or curbing Iran's maritime leverage. Markets would still price in a geopolitical-risk premium while Gulf oil inventories are cleared, export operations recover and confidence in shipping routes is rebuilt. (giulia.petroni@wsj.com)
0302 ET - Brent crude edges lower in early trading after settling above $100 a barrel, though prices remained on track for weekly gains of more than 12% as threats to Red Sea shipping stoked fears of further supply disruptions. The global oil benchmark falls 1.3% to $99.39 a barrel, while WTI futures slip 1.4% to $90.89 a barrel. "The key question is at what price level pressure begins to build on the Trump administration to return to the negotiating table," analysts at ING say. Based on previous price spikes during the early stages of the conflict, they say pressure to de-escalate would rise significantly if Brent approaches $120 a barrel. For Iran, the more pressing issue is not the level of oil prices, but how long the country can withstand a sharp drop in oil revenue under the U.S. blockade. (giulia.petroni@wsj.com)
0251 ET - Volkswagen reiterated its 4%-5.5% group operating profit guidance corridor for 2026, which is positive considering the current gloom surrounding the sector, even if revenue guidance was reduced, Bernstein analysts write. The 2Q operating margin of 4.2% is below the 4.7% forecast in a company-compiled consensus but in line with Bernstein's, while cash flow was ahead of consensus but again in line with Bernstein. The bank says Volkswagen management is trying to walk the tightrope of reassuring investors while at the same time telling its workforce that the house is on fire and that painful cuts to capacity, requiring significant plant closures, are unavoidable. "That is an almost impossible needle to thread and explains our market perform rating." Bernstein has a 100 euros price target on the stock. VW shares closed at 72 euros. (dominic.chopping@wsj.com)
(END) Dow Jones Newswires
July 24, 2026 16:50 ET (20:50 GMT)
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