TD Cowen analyst Jason Seidl upgraded the rating on Norfolk Southern to a Buy today, setting a price target of $323.00.
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Jason Seidl has given his Buy rating due to a combination of factors, primarily driven by the increasing likelihood of East-West rail consolidation. This potential consolidation is expected to create significant synergies, offering substantial upside to Norfolk Southern’s shares. The anticipation of a bid announcement by Union Pacific could act as a catalyst, especially as the perception of regulatory challenges is gradually improving, presenting a favorable risk/reward scenario.
While there is a risk that Union Pacific might shift its focus to CSX, the expectation of a potential bid from BNSF is likely to provide a support level for Norfolk Southern’s stock. Additionally, the broader industry trend towards consolidation among Class I railroads is expected to benefit both Eastern rail companies, regardless of which pairing occurs first. This strategic outlook, combined with current estimates and valuation metrics, underpins the Buy rating for Norfolk Southern.
In another report released on July 19, TR | OpenAI – 4o also reiterated a Buy rating on the stock with a $318.00 price target.