Railroad Stocks Keep Chugging Along (GBX, CSX, UNP, NSC, CP, CNI)

Tickerspy’s Railroad Index

RAILROAD INVESTING IDEAS

• Popular long ideas: CSX, UNP, NSC
• Popular short ideas: NSC, CSX, TRN
• Top dividend plays: ARII, NSC, GMT
• Pro favorites: UNP, CNI, NSC

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RAILROAD COVERAGE

These firms transport goods via the rails

• Burlington Northern Delivers Big Dividend For Berkshire (BRK.A, UNP, CSX, NSC, CP, CNI, BRK.B)
• Working On The Railroad: Buffett Adds Jobs After 2009 Cuts (BRK.A, GBX, UNP, GE, CMCSA, TMK, BAC, BRK.B)
• Buffett Sector Surges After CSX Report (CSX, GBX, GWR, CP, UNP, CNI, BRK.A, BRK.B, NSC)

RAILROAD CHART

RAILROAD METRICS

Avg. Market Cap:	$15.0B
Avg. P/E Ratio:	22.6
Avg. Div Yield:	1.4%

Despite a disappointing December jobs report that may renew concerns regarding the strength of the U.S. economic recovery, railroad operators, one of the more economically sensitive sectors, are enjoying a solid run today with the Railroad Stocks Index surging 0.8%.

Greenbrier Companies (GBX), a freight car manufacturer, is contributing to the positive sentiment for railroad operators after reporting a smaller-than-expected loss for its fiscal first quarter helped by higher railcar shipments and the company told investors it expects to breakeven in its fiscal second quarter. Greenbrier lost $2.3 million, or 11 cents a share in the quarter, compared with a loss of $3.2 million, or 19 cents a share, a year earlier. Revenue surged 17% to $201.4 million.

Analysts were expecting a loss of 15 cents a share on revenue of $195.1 million. New railcar deliveries in the quarter tripled to 1,050 units, Reuters reported.

Positive analyst comments are also helping select railroad stocks after Jefferies initiated coverage of several Index constituents. The brokerage firm started coverage of CSX (CSX) with a “buy” rating and a $75 price target, implying decent upside from where CSX currently trades.

The firm also started Union Pacific (UNP) at “buy” with a $108 price target. The shares currently trade just under $94 after gaining almost 34% in the past six months. Norfolk Southern (NSC) also got a “buy” rating in new coverage with a $74 price target.

Jefferies is also bullish on Canadian Pacific Railway (CP), which it gave a “buy” rating and $77 price target to, but the firm is less constructive on another Canadian name, Canadian National Railway (CNI), which it started at “hold” with a $69 price target. That’s barely above where Canadian National currently trades.

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Tags: CNI, CP, CSX, GBX, NSC, UNP