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Rail News Home Rail Industry Trends

5/12/2010



Rail News: Rail Industry Trends

Stifel Nicolaus' Larkin: CSX, NS top transportation performers


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The Wall Street Transcript recently published its Transportation and Automotive Report, which reviews those sectors for investors and transportation industry executives. On Monday, Wall Street Transcript released a brief excerpt that includes a review of rail industry performance from Stifel Nicolaus Co. Inc. analyst John Larkin.

Addressing the question, "Who do you like within the transportation and logistics sectors, and why?", Larkin wrote: “The names that bubble to the top of our list still are CSX and Norfolk Southern, two buy-rated railroads.” CSX “led the parade” with their first-quarter earnings, which bested Wall Street expectations, he said, adding that the Class I “did a great job” with pricing and operational efficiency. CSX is almost always the first railroad to report earnings and sets the tone for the rest of the railroads, Larkin wrote.

NS also posted solid first-quarter performance, “particularly as the steel and auto industries have improved and as the export coal business was relatively strong,” he said. “The utility coal market has not been strong because in spite of the very cold weather, particularly in the Southeast, utilities are still drawing down huge stockpiles.”

By the late second quarter or third quarter, coal volumes will begin to “come back to normal,” which will be “a further shot in the arm, or catalyst, to get the rail stocks moving, or keep them moving, Larkin wrote.


Contact Progressive Railroading editorial staff.

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