Dahlman Rose On Rail Transportation

Dahlman Rose has published a research report on Rail transportation following week 45 results for volume in comparison to the previous weeks.

In the report, Dahlman Rose writes "Week 45 volumes grew 9.3%, vs. 8.6% and 10.4% in the prior two weeks. While y/y growth should continue to slow in the remainder of the year, this is largely due to tough comparisons. Last week, Dahlman Rose & Co. hosted an investor dinner with freight economist and transportation industry veteran, Noel Perry, who offered a wide array of observations and predictions on the railroad industry. Mr. Perry believes that the railroads are not cutting as much fixed costs as they may have hoped. He believes much of the cost cutting relates to variable costs which will have to come back with higher volume levels and notes that the increasing dwell time is indicative of network congestion issues to come. Mr. Perry also mentioned that he expects price increases in the high-single digits and possibly higher in the next couple of years due to the capacity constraints in the market."

Companies related to this report include:

Canadian National (NYSE: CNI) Buy $64.08 PT: $70.00

Candian Pacific (NYSE: CP) Hold $65.27 PT: --

CSX Corporation (NYSE: CSX) Buy $61.81 PT: $73.00

Genesee & Wyoming (NYSE: GWR) Hold $46.18 PT: --

Kansas City Southern (NYSE: KSU) Hold $46.76 PT: --

Norfolk Southern (NYSE: NSC) Buy $61.06 PT: $66.00

RailAmerica (NYSE: RA) Hold $12.21 PT: --

Union Pacific (NYSE: UNP) Buy $90.32 PT: $102.00