May 14, 2018 / 3:22 PM / 6 months ago

BUZZ-CSX Corp: Goldman Sachs upgrades to "neutral"

** Goldman Sachs upgrades CSX Corp to “neutral” from “sell”, expects the railroad operator to show biggest improvement in operating ratio over the next 12 months

** Canadian National Railway is expected to show sequential improvement in margins through 2018, but network improvement will be balanced by elevated capex levels - write analysts, downgrade to “neutral” from “buy”

** Keeps “buy” rating on Canadian Pacific Railway and “sell” on Union Pacific Corp

** CSX up 0.2 pct, while UNP was down 0.4 pct and CP, CNI were marginally higher

** Overall, brokerage “neutral” on rails as service issues expected to remain an overhang and sector yet to see impact of higher headcount, lower quality locomotives returning to service and broader inflationary dynamics

** Sees partial benefit from a favorable outlook on pricing though this is likely to lag costs

** CSX has gained 15 pct this year, while CNI has fallen 4 pct (Reporting by Amy Caren Daniel in Bengaluru)

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