(The Associated Press circulated the following on October 23.)
NEW YORK — Shares of railroad operators pulled back with the broader market Thursday, despite Union Pacific Corp. reporting third-quarter results that surpassed Wall Street’s expectations and an analyst upgrading Norfolk Southern Corp.
Union Pacific, the country’s largest freight railroad, also issued a profit prediction for the fourth-quarter and full-year above what analysts currently forecast.
Stifel Nicolaus & Co. analyst John Larkin lifted Norfolk Southern to “Buy” from “Hold,” citing its better-than-expected third-quarter profit released on Tuesday.
Larkin suggested the stock is undervalued, being pulled down by turmoil in the broader market. He noted that the Norfolk, Va.-based railroad is well-positioned for future growth as its “outlook continues to improve.”
Longbow Research analyst Lee Klaskow called Norfolk Southern “the gold standard (rail) operator in the East,” noting it continues to grow through improving productivity.
The second-largest U.S. railroad operator, Burlington Northern Santa Fe Corp. is set to release third-quarter results after the market closes.
In afternoon trading, Union Pacific fell $1.72, or 3 percent, to $55.17. Norfolk Southern lost $2.50, or 4.6 percent, to $52.04. Burlington Northern slipped $2.21, or 2.73 percent, to $78.65.