UPDATE: BMO Capital Markets Reiterates Perform, $78 PT on CN Railway

BMO Capital Markets reiterates its Perform rating and $78 price target on CN Railway CNI following a company-analyst meeting. BMO Capital Markets notes, "Management expects volume growth of mid-single digits in 2012 and in excess of GDP growth over the medium term. Pricing grew 4% y/y in 2011 and the trend is likely to be similar in 2012. We believe that CN Rail's successful service-focused strategy should drive sustainable price growth realization over the medium term. On the cost side, robust execution is expected to drive labour and assets productivity, with the only notable headwind being the $120 million increase in pension expense. CN Rail is projecting EPS growth of up to 10% in 2012. Overall, projections were consistent with CN Rail's previous guidance and our forecasts." CNI closed at $78.21 a share on Thursday.