Wells Fargo Upgrades Norfolk Southern to Outperform

Wells Fargo is out with its report today on Norfolk Southern NSC, upgrading NSC from Market Perform to Outperform. In a note to clients, Wells Fargo writes, "We are upgrading NSC to Outperform from Market Perform as we think recent favorable pricing, operating momentum and improved execution is sustainable. This in turn boosts our estimates and valuation range. We raise our 2011E EPS to $5.23 from $4.81 and 2012E EPS to $6.10 from $5.70. Our valuation range moves to $85-92 from $80-86 (same 14-15x P/E target applied to our higher estimates). Q2 2011 EPS of $1.56 was $1.38 excluding a tax benefit and still better than our $1.30 estimate and Street's $1.28." At the time of posting, shares of NSC were trading at $77.87, up 3.07% from Tuesday's close.