BAML see rails as overvalued

|By:, SA News Editor

Bank of America Merrill Lynch issues a sweeping downgrade across the railroad sector on valuation concerns.

Norfolk Southern (NSC -2%) is moved to Neutral from Buy and assigned a lowered price target of $182.

Canadian National Railway (CNI -1.1%) is also dropped to Neutral from Buy and lands a price target of $93.

Union Pacific (UNP -1.4%) is taken to Neutral as well and tagged with a price target of $164 vs. $177 prior PT.

BAML also lowered price targets on Genesee & Wyoming (GWR -2%) to $87 from $94 and Kansas City Southern (KSU -0.7%) to $122 from $130.

Forward price-to-earnings ratios: GWR 18.5, CNI 17.9, UNP 16.9, NSC 16.7, KSU 14.9.

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