(The Associated Press circulated the following on July 30.)
NEW YORK — A JPMorgan analyst upgraded shares of railroad operator Norfolk Southern Corp. to “Overweight” Monday, saying the stock is low risk because the company will increase shipping volumes in the second half of the year.
Thomas Wadewitz expects volumes to remain weak for most railroad companies. However, he said, Norfolk Southern will face easier volume comparisons than other railroads, and should be able to top its third- and fourth-quarter results from 2006.
Wadewitz upgraded the Norfolk, Va., stock to “Overweight” from “Neutral.”
“Volume comparisons become easier for Norfolk Southern in third quarter while volume comparisons for the other rails don’t ease meaningfully until first quarter 2008,” he said. The company should also get a boost after it reprices some of its coal contracts, he added.
Norfolk is making investments to improve its intermodal transport capacity, which Wadewitz said should lead to stronger growth next year.
“Norfolk’s capacity investments on its Heartland corridor and Columbus intermodal terminal provide catalysts for a significant acceleration in intermodal volumes which we expect in 2008,” he said.