CSX upgraded to Buy at BofA after report of Union Pacific interest in M&A

As previously reported, BofA upgraded CSX (CSX) to Buy from Neutral with a price target of $42, up from $34, after digital news platform Semafor reported that Union Pacific (UNP) has hired an investment bank to explore an acquisition of an Eastern railroad. The firm, which notes that there are two public Class I rails – CSX Corp and Norfolk Southern (NSC) – also argues that CSX’s internal service improvements warrant a valuation revisit. The firm, which additionally rolled forward its target multiple as mid-year passes and notes increased target multiples for the rail group, also raised its price target on Buy-rated Eastern peer Norfolk Southern to $305 from $290.