October 18, 2018 / 2:18 PM / 5 months ago

BUZZ-Railroads fall after BofA moves to sidelines

** Bank of America downgrades Canadian National Railway , Union Pacific and Norfolk Southern to “neutral”; shares down between 0.8 pct and 1 pct

** Says UNP and NSC downgrade is based on valuation run up around expectations of operational improvement, given Union Pacific’s plan to add precision scheduled rail principles and Norfolk’s accelerated targets in 2019

** Brokerage cites CNI’s rating cut due to relatively high valuation and its ongoing capex upgrades

** BofA has “buy” on CSX Corp and Canadian Pacific ; CSX declined 1.5 pct, CP fell 1 pct

** However adds that Rails appear on pace to outperform S&P 500 in 2018

** Says railroads have competitive advantages in being the lowest cost form of surface transportation, maintaining pricing that supports solid margins, among other things

** The S&P 500 railroads subindex has gained 15 pct this year, vs a 5 pct rise in the S&P 500 index (Reporting by Amy Caren Daniel in Bengaluru)

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