Dahlman Rose Out With Update On Rail Sector (CSX, NSC, UNP)

Dahlman Rose is out with an update on the rail sector as all six public railroads have reported earnings. Norfolk Southern NSC, CSX CSX, Union Pacific UNP, Canadian National Railway (USA) CNI, Kansas City Southern KSU, Canadian Pacific NYSE and Rail America RA all reported strong earnings reports. Dahlman Rose has price targets on Canadian National ($70), CSX ($68), Norfolk Southern ($67) and Union Pacific ($92). In the report, Dahlman Rose writes, "All six publicly-traded railroads and one short line have reported 2Q10 earnings results. All have delivered decisive earnings beats and in line or better-than-expected revenues. More importantly, while the companies have thrown in a hint of caution here and there, they have offered largely positive commentary regarding industry and overall economic outlook. They have also detected few or no signs of a major economic slowdown or a double-dip recession. While part of the positivity may stem from the railroads' attempt to avoid talking down an ongoing recovery, we believe this rail earnings season has thus far provided a much needed bright contrast to the somewhat grim state of the securities markets of the last couple of months."