Norfolk Southern (NYSE:NSC) shares surged in the early part of Monday's session before retreating after it was upgraded to Buy/Overweight at Citi and Wells Fargo.
Wells Fargo analysts also lifted the firm's price target on the stock to $250 from $225 in a research note, telling investors that "bottoming intermodal volumes, lagging productivity, and an accommodating valuation drive a favorable setup."
NSC's stock price is currently up 0.5% at $218.80 after initially hitting a high of almost $224 per share.
"Service driven pricing and accelerating intermodal volume can drive growth. Near term, intermodal volumes have stabilized as other carload volumes face pressure," said the analysts. "NS's relatively high intermodal exposure (~57% of carloads) should be a benefit."
Citi analysts raised the price target on NSC to $257 from $226.
The analysts wrote in a note that "Transport fundamentals are running at/near lows for this cycle and second-derivative improvement in 2H23 will be a catalyst."