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What follows is a list of transportation companies that are rated a "buy" or better on the Street. They cover a variety of industries: mail delivery, airlines, and railroads. Of the three, I am particularly bullish about Norfolk Southern's (NYSE:NSC) safe upside due to improving economic trends and opportunities from free trade legislation.

United Parcel Service (NYSE:UPS)

UPS trades at a respective 18x and 14x past and forward earnings with a dividend yield of 3%. It is 20% less volatile than the broader market.

Consensus estimates for UPS' EPS forecast that it will grow by 14.4% to $4.84 in 2012, and then by 13.2% and 16.4% in the following two years. Assuming a multiple of 15x and a conservative 2013 EPS of $5.43, the rough intrinsic value of the stock is $81.45, implying 6.1% upside. With only a 10% market share in Europe, UPS has significant room for penetration. It is implementing a $200M European air hub project to improve capacity by around 70%.

Southwest Airlines (NYSE:LUV)

Southwest trades at a respective 41x and 8.8x past and forward earnings with a dividend yield of 0.2%. It is 10% less volatile than the broader market.

Consensus estimates for Southwest's EPS forecast that it will grow by 90.7% to $0.82 in 2012, and then by 31.7% and 9.3% in the following two years. Assuming a multiple of 12.5x and a conservative 2013 EPS of $1.05, the rough intrinsic value of the stock is $13.13, implying 39.2% upside. Southwest is one of the few in its industry to not declare bankruptcy while stunningly maintaining an investment grade rating.

Norfolk Southern

Norfolk Southern trades at a respective 12.6x and 10.3x past and forward earnings with a dividend yield of 2.7%. It is 170% less volatile than the broader market.

Consensus estimates for Norfolk Southern's EPS forecast that it will grow by 10.8% to $5.97 in 2012, and then by 12.4% and 11.6% in the following two years. Assuming a multiple of 14x and a conservative 2013 EPS of $6.65, the rough intrinsic value of the stock is $93.10, implying 35.3% upside. Norfolk Southern has a sustainable competitive advantage due to its direct connection from the Appalachian and Illinois coal mines. At the same time, the company is investing in new freight cars to improve demand. It is estimated that management will spend as much as $3B in capital expenditures.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: 3 Transportation Firms Wall Street Says To 'Buy' Now