Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

Click here to see some testimonials from our members!

Citi Bullish On Rail Stocks, Upgrades Norfolk Southern

Courtesy of Benzinga.

Citi Bullish On Rail Stocks, Upgrades Norfolk Southern

U.S. railroad industry is booming and one Wall Street analyst says it’s full steam ahead for Norfolk Southern Corp. (NYSE: NSC).

The Analyst

Citi analyst Christian Wetherbee upgraded Norfolk Southern from Neutral to Buy and has raised his price target from $161 to $176.

Weatherbee also reiterated ratings on the following five railroad stocks:

  • Canadian National Railway (USA) (NYSE: CNI), Neutral rating, $85 target.
  • Canadian Pacific Railway Limited (USA) (NYSE: CP), Buy rating, $215 target.
  • CSX Corporation (NASDAQ: CSX), Buy rating, price target raised from $67 to $75.
  • Kansas City Southern (NYSE: KSU), Buy rating, $123 target.
  • Union Pacific Corporation (NYSE: UNP), Buy rating, $170 target.

The Thesis

Norfolk Southern has a good chance to exceed consensus earnings expectations, and earnings multiples are already expanding in the group.

“We acknowledge NS’s service issues, which have kept us on the sidelines previously, but volume and pricing trends have been better than expected and we want to take advantage of the modest pause in shares recently to get more constructive,” Wetherbee said in the note.

He said Q2 volumes have been better than expected, and Citi has raised 2018 and 2019 EPS projections for railroad stocks as a group. Following the recent tax reform, Wetherbee said U.S. rail stocks have a chance to produce meaningful free-cash-flow growth. If capex remains elevated over time, Wetherbee said earnings multiples will likely expand accordingly.

CSX is Citi’s top stock pick in the space, but rail stocks are a “must-own” sub-sector of the market for the time being.

Price Action

Norfolk Southern stock traded lower by less than 1 percent to $151.50.

Related Links:

Stifel Rides The Rails, Initiates Seven Stocks

Goldman Sachs Upgrades CSX, Downgrades Canadian National In Second Look At Rail Stocks

Latest Ratings for NSU

Date Firm Action From To
Nov 2017 Macquarie Upgrades Neutral Outperform
Mar 2017 BMO Capital Upgrades Market Perform Outperform
Oct 2016 Canaccord Genuity Downgrades Buy Hold

View More Analyst Ratings for NSU


View the Latest Analyst Ratings

Posted-In: Christian Wetherbee CitiAnalyst Color Upgrades Price Target Top Stories Analyst Ratings Best of Benzinga


Do you know someone who would benefit from this information? We can send your friend a strictly confidential, one-time email telling them about this information. Your privacy and your friend's privacy is your business... no spam! Click here and tell a friend!





You must be logged in to make a comment.
You can sign up for a membership or get a FREE Daily News membership or log in

Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

Click here to see some testimonials from our members!