Morgan Stanley analyst Ravi Shanker said CSX (CSX) is clearly taking advantage of the strong freight environment and its new management team is executing and delivering on their promises. However, he also thinks they are making up for lagging volumes with cost cutting and he believes railroads showing sustainable topline growth at good margins, such as Canadian National (CNI) and Canadian Pacific (CP), deserve to trade at a premium to railroads that are growing EPS primarily by cost cutting. Shanker, who continues to see "significantly better risk-reward" elsewhere in rails, keeps an Underweight rating on CSX and raised his price target on the shares to $52 from $49.

Scotiabank lowered the firm's price target on Canadian Pacific Kansas City to C$124 from C$126 and keeps a Sector Perform rating on the shares.

Susquehanna analyst Bascome Majors lowered the firm's price target on Canadian Pacific Kansas City to $80 from $84 and keeps a Neutral rating on the shares. The firm views the company's nearer-term conservatism as prudent given the historic unpredictability of Canadian Teamsters labor negotiations, and remain on the sidleines primarily because of valuation.

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