BMO Capital analyst Fadi Chamoun upgraded Canadian National Railway (CNI) to Outperform from Market Perform with a price target of C$130, up from C$123. There is a strong case to be made that the worst of the volume headwinds are here for or even behind the railroads, Chamoun tells investors in a research note. The analyst, who thinks volume growth momentum should pick up in the second half of 2020, is also upgrading his view on the rail sector. He says Canadian National Railway is a low-cost operator of a "high-quality and unique physical footprint," bringing it "durable competitive advantages and strong medium- to long-term growth fundamentals." Chamoun is reversing his September 2018 cautious call on the Railroads group. The analyst also continues to recommend Union Pacific (UNP) and Canadian Pacific (CP) with Outperform ratings. He keeps Market Perform ratings on Norfolk Southern (NSC) and Kansas City Southern (KSU).

CN announced that its new three-year collective agreement with the United Steelworkers, or USW, Local 2004, was formally ratified by union members on Monday April 29. The USW represents approximately 2,500 track and bridge employees at CN, primarily responsible for track maintenance across Canada. "We're pleased to have reached this new collective agreement through collaborative negotiations. It is a testament to our commitment to invest in our people, contributing to a more productive environment with more opportunities to grow within the organization," said Patrick Whitehead, Executive Vice-President and Chief Network Operating Officer at CN.

Norfolk Southern Corporation Tuesday announced that Institutional Shareholder Services has recommended shareholders support a majority of its director nominees, reflecting a clear endorsement of the company's management and strategy. The company said, "ISS's recommendation in favor of a majority of our director nominees underscores the strength and effectiveness of our board, and the ongoing and effective execution of the company's strategy. Specifically, ISS acknowledges that, "[t]he prevailing strategy appears to be logical, particularly when considered alongside evolving views on rail service..."1 Under Alan's leadership, Norfolk Southern is accelerating a strategy that balances service, productivity, and growth, with safety at its core, and will deliver top-tier revenue and earnings growth with industry-competitive margins. At this critical point in Norfolk Southern's transformation, replacing members of our board with Ancora's inferior nominees would impede this progress, introduce significant risk, and ultimately destroy long-term shareholder value. ISS's recommendation against Jim Barber is a clear indication that a change in management is not warranted, and further, adding him to the board may create an unfavorable dynamic in the boardroom that would impede the Company's progress and momentum. All of Norfolk Southern's director nominees collectively add a wealth of highly relevant experience in the railway and transportation sectors, and important operations, safety, sustainability, risk management, and government regulation expertise. Our highly engaged board is fit-for-purpose to oversee the execution of Norfolk Southern's balanced strategy, enhance safety and operational performance, and drive smart and sustainable long-term growth for our shareholders. While ISS has recognized the strengths of our crisis-tested CEO Alan Shaw, along with independent directors John Huffard, Claude Mongeau, Richard Anderson, Philip Davidson, Francesca DeBiase, Marcela Donadio, and Christopher Jones - we disagree with ISS's recommendation as it relates to certain members of Ancora's slate. The ISS recommendation relating to Ancora's nominees jeopardizes the election of Norfolk Southern's board candidates who are critical to the effective oversight of the company, including Amy Miles, Heidi Heitkamp, Thomas Kelleher, Jennifer Scanlon, and John Thompson."

Norfolk Southern shareholder Ohio-based Ancora Holdings, which owns a large equity stake in Norfolk Southern, announced that proxy advisory firm Glass Lewis recommends the company's shareholders vote to elect six dissident nominees on the Blue Proxy Card at the upcoming Annual Meeting of Shareholders on May 9. In particular, Glass Lewis recommends for the following Ancora nominees: Betsy Atkins, James Barber, Jr., William Clyburn, Jr., Sameh Fahmy, Gilbert Lamphere and Allison Landry. In its report, Glass Lewis noted the following regarding the need for change at Norfolk Southern: "...we believe Ancora has presented a compelling case for supporting a substantial overhaul of the Company's current leadership." "Based on our review, we believe the operating performance of the company has been consistently worse than its peers for an extended period." "We are also inclined to agree with Ancora's critique of the company's current operating strategy as being one that relies on inherently incompatible railroading concepts." "[I]t's not readily evident to us the Company's current leadership had built up a sufficiently positive track record such that investors might reasonably have the patience to allow management to implement a relatively novel operating strategy." "We also believe that Ancora's candidates for the Company's top executive roles - James Barber, Jr. as CEO and Jamie Boychuk as COO - have compelling credentials and track records."