(The Associated Press circulated the following on March 1, 2010.)
NEW YORK — A Barclays Capital analyst said Monday he believes investors aren’t paying enough attention to the earnings growth potential of Norfolk Southern Corp., citing the railroad operator’s pricing strength, improving shipping volume and potential for stronger coal shipments.
Analyst Gary Chase upgraded the stock to “Overweight” from “Equal Weight” and raised his share price target to $62 from $55.
He said in a client note that Wall Street’s current earnings forecasts for the railroad seem to factor in “an exceptionally negative impact” from the recession. In the long term, Chase thinks the company will beat those expectations.
Chase said earnings estimates for the first two quarters of this year “appear considerably too low.”
Chase added that the railroad’s pace of price increases has slowed, but he thinks that should ramp back up in the second quarter. Furthermore, the improving outlook for coal shipments should boost the railroad’s earnings in the long term, he said.
Shares rose $1.12, or 2.2 percent, to $52.55 in afternoon trading.