Dahlman Rose Provides Color on the Rail Sector

Dahlman Rose provided color on the rail sector. In a research report published today, Dahlman stressed a number of improvements in the sector.

In the report, Dahlman states, "North American Class I rail traffic grew 4% in Week 19, 2011 vs 3.1% and 1.7% increases in the prior two weeks. The 4% growth in overall volumes was largely attributable to an 8.9% increase in agricultural products, an 8.4% rise in metals, a 6.7% improvement in chemicals, and a 5.9% growth in intermodal."

At the moment, Dahlman has a Buy rating on Canadian National Railway (NYSE: CNI). The price target on its stock is set at $79. On Friday, Canadian National Railway lost 0.28% to close the week at $77.02. Another Buy-rated company is CSX Corporation (NYSE: CSX). Dahlman currently has a price target of $90 placed on its stock. On Friday, CSX added 0.44% to its value to close the week at $77.40. Norfolk Southern Corporation (NYSE: NSC) also has a Buy placed on its stock. The price target is set at $89. On Friday, Norfolk lost 0.62% of its value to close the week at $72.26. The list of companies with a Buy rating is concluded with Union Pacific Corporation (NYSE: UNP). Its price target is set at $117. On Friday, Union Pacific lost 0.78% of its value to close the day at $101.99.

Dahlman currently has a Hold rating on the following stocks: Canadian Pacific Railway Limited (NYSE: CP), Genesee & Wyoming (NYSE: GWR), Kansas City Southern (NYSE: KSU) and RailAmerica (NYSE: RA).

On Friday, Canadian Pacific lost 0.48% to close the week at $61.70, while Genesee & Wyoming lost 0.92% to end the day at $58.24. Kansas City Southern is the only Hold-rated stock to make gains on Friday, rising 0.23% to $56.80. Finally, RailAmerica lost 1.36% on Friday and is currently standing at $15.28.