BUZZ-Bernstein cuts railroad operator PTs on slow start to 2025
Bernstein cuts PTs on rail operators, citing slower start to 2025 due to cost pressures and weather-related challenges affecting shipping activity in Q1
"The railroads have gone from being a consensus long sector to being a relatively boring group, dragged down by anemic demand and struggling through cost pressure and margin erosion." - Bernstein
Brokerage believes rate of change in supply and demand continues to work in favor of rail, but is concerned on further slowing recovery of freight economy, in response to policy "paralysis" and government spending cuts
Bernstein says it has a general preference for U.S.-based operators over Canada, as they have "less to lose on tariffs and more to gain from a tighter truck market"
As of last close, the Dow Jones Transport Average index .DJT had risen 3.6% YTD
Company | New PT | Old PT |
Canadian Pacific Kansas City CP.N | $85.40 | $86.10 |
Norfolk Southern Corp NSC.N | $286 | $296 |
Union Pacific Corp UNP.N | $284 | $277 |
CSX Corp CSX.O | $34 | $37 |
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