Dahlman Rose Has Thoughts On Rails (CSX, UNP, NSC)
Dahlman Rose & Co. is out with its industry report on the railroad sector. In the report, Dahlman Rose covers NiSource Inc. (NYSE: NI), Canadian Pacific Railway Limited (NYSE: CP), CSX (NYSE: CSX), Genesee & Wyoming Inc. (NYSE: GWR), Kansas City Southern (NYSE: KSU), Norfolk Southern Corp. (NYSE: NSC), RailAmerica, Inc. (NYSE: RA), and Union Pacific Corporation (NYSE: UNP). It has Buy ratings on CNI, CSX, UNP, & NSC. The others are rated Hold. It also has a $92 price target on UNP, the highest in the group.
In the research note, Dahlman Rose writes, "Week 36 results represented decreased volume growth as overall North American rail traffic grew just 12.0%, vs 12.9% and 12.8% in the prior two weeks. This is still the lowest y/y growth rate in the last five weeks. While the decelerating growth will likely continue and become more pronounced in the remainder of the year, it is largely attributable to toughening y/y comparisons rather than a real dampening in market demand. That said, week 36 traffic declined sequentially for the first time in the last four weeks as it was down 10% from the prior week to 738,166 carloads."
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