Since the Presidential Emergency Board proposed an 18.6% increase in the wage rate for rail workers over a period of six years, rail companies have reached agreements with four unions.  Rail carriers such as Union Pacific Corporation (NYSE:UNP), Norfolk Southern Corporation (NYSE:NSC), and CSX Corporation (NYSE:CSX) and labor unions, representing 70% of rail workers, have been given a 30-day period ending December 6th to reach a settlement.
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- Norfolk Southern’s Q2 2016 Earnings Review: Top Line Pressure Weighs On Results
- Norfolk Southern’s Q2 2016 Earnings Preview: Lower Shipments And Fuel Surcharge Revenue To Weigh On Results
- How Do Union Pacific, Norfolk Southern, And CSX Compare In Terms Of Efficiency Of Their Rail Networks?
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- Automotive Shipments: The Most Prominent Growth Area For Norfolk Southern This Year
In other news, Norfolk Southern is constructing an intermodal yard in eastern Montgomery County. The project, with an estimated cost of $35 million, is expected to improve freight handling as the yard will be built near company’s existing track.  Separately, the freight carrier has selected not to refinance its $1 billion five-year revolving credit line from any European lender as turmoil in Europe mounts.  This highlights company’s reluctance to expose itself to additional risks.
We have a price estimate for Norfolk Southern at $91, implying around 25% premium to current market price.Notes:
- Freight Railroads Reach Agreements with Four More Unions, Bloomberg [↩]
- Norfolk Southern in process of buying land for intermodal yard, Roanoke.com [↩]
- Norfolk Drops European Banks From Refinancing, Wall Street Journal [↩]