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.
- Norfolk Southern’s Q4 2016 Earnings Review: Improved Demand Conditions And Productivity Savings To Boost Results Going Forward
- Norfolk Southern’s Q4 2016 Earnings Preview: Recovering Shipment Volumes And Productivity Improvement Initiatives To Boost Earnings
- Why We’re Raising Our Price Estimate For Norfolk Southern To $107
- The Year 2016 In Review: Successful Cost Reduction Initiatives To Enable Norfolk Southern To Take Advantage Of Better Business Conditions In 2017
- How Norfolk Southern Could Benefit From A Revival In The Coal Industry Under The Incoming President
- How Would A Proposed Reduction In Federal Taxes By The Incoming President Impact Norfolk Southern?
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 [↩]