Deutsche Bank Markets Research North America Canada Industrials Railroads Industry Canadian Rails Flipping the Script - Buy CP, Sell CNI Initiating Coverage of Canadian Rails We are expanding our coverage of Transportation companies with initiation of coverage of the Canadian railroad industry. We are positive on Canadian Pacific (CP, Buy) and cautious on Canadian National (CNI, Sell), as we see overall market share and earnings trajectory driving a reversal in recent relative value trends. All told we forecast CP to grow EPS at double the rate of CNI (+30% for CP vs. +15% for CNI cumulatively through 2019), which together with capex and free cash trends should drive re-rating at CP and de-rating for CNI. In this report we present a primer on the Canadian rail industry, with deep dives on Canadian Pacific and Canadian National. Date 31 October 2017 Initiation of Coverage Station Chfi31, CFA Associate Analyst +1.212.2603969 Anilt Mehrotra Research Analyst + I -212-250-2076 Keirrs WM:km Research Associate +1-212-250-7164 Chris Snytitn CFA Research Associate +1.212.250-O165 Deutsche Bank Securities Inc. Distributed on: 31/10,2017 20:03:27 GMT Deutsche Bank does and seeks to do business with companies covered in its research reports. Thus, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. DISCLOSURES AND ANALYST CERTIFICATIONS ARE LOCATED IN APPENDIX I . MCI (P) 0B310412017. CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0064269 CONFIDENTIAL SDNY_GM_00210453 EFTA01371086