Norfolk Southern (NSC) Upgraded By JPMorgan & Bank of America

NEW YORK (TheStreet) -- Norfolk Southern (NSC) was upgraded by both JPMorgan and Bank of America.

Norfolk Southern gained 1.6% to $94.38 in early market trading on Thursday.

JP Morgan upgraded the railroad company to "overweight" from "neutral," saying the company's coal headwind will likely disappear in 2014.

Bank of America upgraded the railroad company to "buy," setting a price target of $103. The firm expects Norfolk Southern to continue its current impressive rebound.

TheStreet Ratings team rates NORFOLK SOUTHERN CORP as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:

"We rate NORFOLK SOUTHERN CORP (NSC) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, attractive valuation levels, increase in net income and good cash flow from operations. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • NSC's revenue growth has slightly outpaced the industry average of 2.8%. Since the same quarter one year prior, revenues slightly increased by 4.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 34.08% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, NSC should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Road & Rail industry average. The net income increased by 19.9% when compared to the same quarter one year prior, going from $402.00 million to $482.00 million.
  • Net operating cash flow has increased to $898.00 million or 10.45% when compared to the same quarter last year. In addition, NORFOLK SOUTHERN CORP has also modestly surpassed the industry average cash flow growth rate of 5.20%.

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