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Major US Railroads Through the Eyes of Analysts

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Analyst recommendations for NSC and CSX

The analyst rating scale ranges from one to five, with one meaning a “strong sell” and five meaning a “strong buy.” Let’s see how many analysts are rating each of our US Class I railroad stocks as either a “buy,” “sell,” or “hold.”

Norfolk Southern (NSC) has a Wall Street analyst consensus rating of 3.46, or “hold.” Of the 28 analyst recommendations, eight gave it a “buy,” whereas 19 gave it a “hold,” and one gave it a “sell” rating. NSC’s average 12-month price target is $92.1, as compared to its market price of $92.7 on August 26, 2016.

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By comparison, CSX Corporation (CSX) has a Wall Street analyst consensus rating of 3.71, or “buy.” Of the 28 analysts covering the stock, 13 gave it a “buy” recommendation, and 12 gave it a “hold.” CSX’s average 12-month price target is $29.8, as compared its price of $28.1 on August 26, which translates to an implied return of 5.7%.

CP and CNI

CP has a consensus rating of 4.28, or “buy.” Of the 29 analysts covering CP, 20 gave it a “buy” and eight gave it a “hold.” One analyst holds a “sell” opinion on the company. CP’s average 12-month price target is $163.3, as compared to its price of $153.1 on August 26, which implies a return of 6.6%.

CNI has a Wall Street analyst consensus rating of 3.29, or “hold.” Of the 28 analysts who gave recommendations, six gave it a “buy,” while 20 gave it a “hold,” and one gave it a “sell.” The stock’s average 12-month price target is $64.9, as compared to its market price of $65.1 on August 26, which implies a return of -0.2%.

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UNP and KSU

UNP has a Wall Street analyst consensus rating of 4.07, or “buy.” Out of the 28 analysts covering the stock, 17 analysts gave it a “buy” rating, and nine analysts gave it a “hold.” UNP’s average 12-month price target is $96.8, as compared to its price of $95.1 on August 26, which translates into a potential return of 1.8%.

KSU has a Wall Street analyst consensus rating of 3.57, or “hold.” Of the 21 analysts tracking the stock, eight gave it a “buy,” while 11 gave it a “hold,” and two gave it a “sell.” NSC’s average 12-month price target is $103.8, as compared to its market price of $99.4 on August 26, 2016, which implies a return of 4.4%.

GWR

GWR has a Wall Street analyst consensus rating of 4.08, or “buy.” All of the 13 analysts covering the stock, seven analysts gave it a “buy,” while the remaining analysts have it a “hold.” GWR’s average 12-month price target is $71.4 against its price of $68.8 on August 26, translating into an expected return of 3.6%.

Notably, the iShares Core S&P 500 ETF (IVV) is a growth ETF related to the Standard & Poor’s 500 Index. All US-originated Class I railroads are included in the portfolio holdings of IVV.

In the next and final part of this comparative series, we’ll examine how these railroads are valued.

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