UPDATE: Stifel Nicolaus Reduces PT to 83 on Norfolk Southern

Stifel Nicolaus reiterated its Buy rating on Norfolk Southern

and lowered its price target from $84 to $83. Stifel Nicolaus said, "Margins Contracted Badly, as We Learned in the Pre-announcement; The company's 3Q12 operating ratio deteriorated 540 basis points y/y to 72.9%. A 1% y/y increase in expenses, combined with a 7% drop in revenue, will drive a deterioration in operating ratio of this magnitude. … Trimming Estimates; We are trimming our 2012, 2013, and 2014 EPS estimates from $5.35, $6.15, and $7.00 to $5.32, $5.95, and $6.65, respectively. The decreases are a function of the decelerating economy and uncertainty with respect to the timing of any recovery in coal volumes." Norfolk Southern closed at $66.01 on Tuesday.