I pulled this off of my Sprint PCS phone last night while sitting in a boring gathering that I didn't want to be at. I'd link the article on the regular World Wide Web, but darned if I'll register with those guys for this information. What is typed below is excerpted---can't spell that today---from my little color LCD phone screen. It also dates from 24 March 2004, but that's OK.

Morgan Stanley analyst James Valentine upgraded two of the four major American railroads and downgraded the other two, ostensibly in earnings potential. However, Valentine also stated that he maintains his opinion that the North American railroad industry remains challenged as an asset-intensive, heavily unionized, semi-regulated industry.¹ His actions are taken, he said, in response to divergence in prospects for the sector. His research note stated the likelihood of seeing a "more clear divergence in each carrier's growth trajectory" in the remainder of 2004.

As a result, Valentine now considers Norfolk Southern Corporation (NSC) and Burlington Northern Santa Fe Corporation (BNI) as "overweight", up from "equal-weight". Conversely, Union Pacific Corporation (UNP) and CSX Corporation (CSX) have been downgraded from "equal-weight" to "underweight".²

That was part of a good week for Norfolk Southern's financial picture; earlier the Bear Stearns brokerage house had raised its evaluation of NSC to "outperform" its industry peers (i.e. UNP, CSX, and BNI). Bear Stearns says that NSC is positioned for "greater earnings leverage" in 2004, whatever that means.

Inasmuch as I'm a ruthless booster of Virginia's remaining railway, this is a good thing. Greater earnings won't necessarily lead to me being hired by the Norfolk Southern as a lobbyist or anything, but it might fatten the portfolio when I get around to buying fistfuls of NSC stock.³ More money for NSC is a good thing all around, and I'm glad to hear that the folks at 3 Commercial Place in Norfolk are being rewarded for efforts in business.

Tip of the Wisconsin hat to the management and labor of the Norfolk Southern Corporation. more...

Posted by: Country Pundit at 02:15 PM | No Comments | Add Comment
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