(The Associated Press circulated the following on July 10.)
NEW YORK — A JPMorgan analyst on Thursday upgraded Norfolk Southern Corp. to “Overweight” from “Neutral,” saying the railroad will likely benefit from shrinking truck capacity and higher coal exports more than its peers.
Analyst Thomas R. Wadewitz said shares of the Norfolk, Va., railroad have room to grow considering Wall Street’s relatively low second-quarter earnings expectations. He recommends investors buy up shares ahead of the company’s earnings report, set for July 22. He predicts the railroad will report strong results for the quarter driven by strong yields and rising coal volumes, as other railroads will be dragged down by effects related to the Midwest floods.
Wadewitz said Norfolk Southern is tied stronger to a booming export coal market than the other rails.
Also, he notes that lower capacity in the truckload, or long-haul truck, market will benefit Norfolk Southern more than other rails because of its shorter length of haul and expansive intermodal segment. Intermodal involves moving freight from one method of transportation to another, such as train to truck.
Shares of Norfolk Southern rose $1.96, or 3.3 percent, to $62.31 Thursday. The stock has traded between $41.36 and $67.74 in the past year.