Core Insights - Whales have shown a bullish sentiment towards Union Pacific, with 53% of trades being bullish and 38% bearish [1] - The projected price targets for Union Pacific range from $195.0 to $260.0 based on recent options activity [2] - The company generated $24 billion in revenue in 2024, primarily from various freight categories [9] Options Activity - A total of 13 trades were detected, with 7 puts amounting to $257,965 and 6 calls totaling $3,426,627 [1] - Significant options trades include bullish calls with a total trade price of $2.6 million at a strike price of $260.00 and bearish puts at a strike price of $195.00 totaling $66.2K [8] Market Performance - Union Pacific's current stock price is $216.37, reflecting a decrease of 1.67% [14] - Analyst ratings indicate an average target price of $264.0, with various analysts maintaining buy or neutral ratings [11][12]

Core Insights - Canadian Pacific Kansas City (CP) is expected to report quarterly earnings of $0.81 per share, reflecting an 11% year-over-year increase, with revenues projected at $2.68 billion, a 2.8% increase compared to the previous year [1] - The consensus EPS estimate has been revised upward by 0.6% over the past 30 days, indicating a reassessment by analysts [2] - Changes in earnings estimates are crucial for predicting investor reactions, as empirical studies show a strong correlation between earnings estimate revisions and short-term stock performance [3] Financial Metrics - Analysts predict an 'Adjusted Operating Ratio' of 60.4%, down from 62.9% in the same quarter last year [5] - 'Carloads - Total' are expected to reach 1.13 million, compared to 1.09 million in the same quarter last year [5] - The consensus estimate for 'Carloads - Automotive' is 63.13 thousand, slightly down from 63.70 thousand in the previous year [6] - 'Revenue ton miles (RTMs) - Total' is projected to be 54.58 billion, up from 51.52 billion in the same quarter last year [6] - 'Carloads - Grain' are expected to reach 133.62 thousand, compared to 127.00 thousand in the same quarter last year [7] - 'Carloads - Coal' are projected at 125.92 thousand, up from 121.70 thousand in the previous year [7] - 'Carloads - Potash' are expected to be 51.18 thousand, compared to 40.60 thousand last year [8] - 'Carloads - Fertilizers and Sulphur' are projected at 16.36 thousand, up from 15.60 thousand in the previous year [8] - 'Carloads - Forest Products' are expected to be 32.95 thousand, down from 33.90 thousand last year [9] - 'Carloads - Energy, Chemicals and Plastics' are projected at 138.95 thousand, down from 145.60 thousand in the previous year [9] - 'Carloads - Metals, Minerals and Consumer Products' are expected to reach 124.36 thousand, down from 127.90 thousand last year [10] - The expected 'Operating Ratio' is 59.7%, significantly improved from 66.1% in the previous year [10] Market Performance - Over the past month, Canadian Pacific Kansas City shares have returned +2.3%, outperforming the Zacks S&P 500 composite's +1.3% [11] - The company holds a Zacks Rank 4 (Sell), indicating a likely underperformance compared to the overall market in the upcoming period [11]

Core Viewpoint - Three stocks have been added to the Zacks Rank 5 (Strong Sell) List, indicating a negative outlook for these companies based on recent earnings estimate revisions. Group 1: Company-Specific Summaries - Arcos Dorados Holdings Inc. (ARCO), a franchisee of McDonald's restaurants, has seen its current year earnings estimate revised downward by 1.7% over the last 60 days [1] - Canadian National Railway Company (CNI), a rail and related transportation company, has experienced a 2.7% downward revision in its current year earnings estimate over the last 60 days [1] - Kolibri Global Energy Inc. (KGEI), an explorer and developer of oil, gas, and clean and sustainable energy reserves, has had its current year earnings estimate revised downward by 7% over the last 60 days [2]

Core Insights - Norfolk Southern reported revenue of $3.1 billion for the quarter ended September 2025, reflecting a 1.7% increase year-over-year and exceeding the Zacks Consensus Estimate of $3.09 billion by 0.44% [1] - The company's EPS for the quarter was $3.30, up from $3.25 in the same quarter last year, surpassing the consensus EPS estimate of $3.18 by 3.77% [1] Financial Performance Metrics - Railway Operating Ratio was reported at 64.6%, higher than the estimated 63.7% by analysts [4] - Total carloads volume was 1.8 million, matching the average estimate [4] - Intermodal carloads volume was 1.03 million, consistent with the average estimate [4] - Merchandise carloads volume was 595.1 thousand, exceeding the estimated 589.88 thousand [4] - Coal carloads volume was 176.7 thousand, slightly below the estimated 179.4 thousand [4] Revenue Breakdown - Railway operating revenues from Merchandise (Agriculture, forest, and consumer products) were $630 million, slightly below the estimate of $639.63 million, with a year-over-year change of +1% [4] - Railway operating revenues from Coal were $375 million, below the estimate of $389.94 million, representing a year-over-year decline of 12.2% [4] - Railway operating revenues from Chemicals were $569 million, surpassing the estimate of $560.89 million, with a year-over-year increase of +4.8% [4] - Railway operating revenues from Intermodal were $759 million, slightly below the estimate of $760.31 million, with a year-over-year change of -0.5% [4] - Railway operating revenues from Automotive were $322 million, exceeding the estimate of $299.46 million, reflecting a year-over-year increase of +17.5% [4] - Total Railway operating revenues from Merchandise were $1.97 billion, above the estimate of $1.95 billion, with a year-over-year change of +5.8% [4] - Railway operating revenues from Metals and construction were $448 million, slightly below the estimate of $452.58 million, with a year-over-year increase of +6.7% [4] Stock Performance - Norfolk Southern's shares have returned -1.6% over the past month, contrasting with the Zacks S&P 500 composite's +0.2% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 increased by 2% year-over-year, but was below expectations by approximately $75 million due to macro headwinds and competitor responses to the merger announcement [20][14] - The operating ratio for the quarter was reported at 63.3, reflecting a 10-basis point improvement year-over-year [19][24] - Earnings per share for the quarter were $3.30, indicating a solid bottom-line performance despite revenue challenges [19] Business Line Data and Key Metrics Changes - Merchandise volume grew by 6% year-over-year, driven by strong performance in auto, chemical, metals, and construction markets [14] - Intermodal volumes decreased by 2%, impacted by trade uncertainties and competitor reactions to the merger announcement [15] - Coal revenue per unit (RPU) decreased by 7% due to weakening seaborne coal prices, marking a significant revenue headwind [15] Market Data and Key Metrics Changes - The overall volume for Q3 finished flat despite a 4% increase in gross ton miles (GTM) [14] - The company anticipates softer import demand in intermodal markets due to tariff volatility and oversupplied truck capacity [16] - Utility demand is expected to remain strong, supporting coal markets, but export coal markets face significant uncertainty [17] Company Strategy and Development Direction - The company is focused on maintaining safety and service while preparing for growth, particularly in light of the proposed merger with Union Pacific [7][24] - Norfolk Southern is committed to enhancing productivity and efficiency, raising its cumulative efficiency target to approximately $600 million by 2026 [10][24] - The company is investing in technology and operational analytics to improve inspection and reliability across its network [12][13] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the uncertain macroeconomic environment and the challenges posed by competitor reactions to the merger [23] - The company remains optimistic about its long-term growth potential, particularly with the upcoming merger and ongoing investments in infrastructure [24] - Management emphasized the importance of maintaining strong safety performance and service quality as top priorities [84] Other Important Information - The company recorded a significant land sale at the end of the quarter, contributing positively to financial results [20] - Claims expenses were elevated due to unfavorable developments from previous years, despite improvements in safety metrics [21] Q&A Session Summary Question: Impact of merger-related business losses - Management indicated that the impact is primarily confined to intermodal and is expected to persist until the merger closes, with efforts underway to retain customers [27][28] Question: Cost structure management in a challenging environment - Management highlighted the importance of maintaining productivity and efficiency while being cautious about cost control, especially in light of potential share loss [35][36] Question: Coal RPU pressure and future expectations - Management clarified that while coal RPU is expected to remain under pressure year-over-year, it may stabilize on a sequential basis [44][46] Question: Competitive responses and customer retention - Management expressed confidence in retaining business with key customers due to the strength of their intermodal network and service offerings [52][56] Question: Revenue erosion and volume loss risks - Management acknowledged the risk of further volume loss but emphasized ongoing efforts to market and retain business [96]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 increased by 2% year-over-year, but was below expectations by approximately $75 million due to macro headwinds and competitor responses to the merger announcement [14][20] - The operating ratio for the quarter was reported at 63.3, reflecting a 10-basis point improvement year-over-year [19][24] - Earnings per share for the quarter were $3.30, indicating a stable bottom line despite revenue challenges [19] Business Line Data and Key Metrics Changes - Merchandise volume grew by 6% year-over-year, driven by strong performance in auto, chemical, metals, and construction markets [14] - Intermodal volumes decreased by 2%, impacted by trade uncertainties and competitor reactions to the merger announcement [15][16] - Coal revenue less fuel declined by 7%, primarily due to weakening seaborne coal prices, although utility demand remained strong [15][17] Market Data and Key Metrics Changes - The overall market environment remains dynamic, with expectations of softer import demand and continued pressure on coal prices [16][17] - Manufacturing activity is expected to grow, but vehicle production may face challenges due to disruptions at key material suppliers [16] - The intermodal segment is experiencing volume pressure, particularly in the Southeast, as competitors respond to the merger announcement [17][18] Company Strategy and Development Direction - The company is focused on maintaining safety and service while preparing for growth, particularly in light of the proposed merger with Union Pacific [7][24] - Norfolk Southern is committed to enhancing productivity and efficiency, raising its cumulative efficiency target to approximately $600 million by 2026 [10][24] - The company is investing in technology and operational analytics to improve inspection and reliability across its network [12][66] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the uncertain macroeconomic environment and the potential for unpredictable demand fluctuations in the coming quarters [23][24] - The company remains optimistic about future growth opportunities, particularly post-merger, which is expected to enhance service offerings and operational efficiency [23][24] - Management emphasized the importance of maintaining strong safety performance and customer service as top priorities [84][85] Other Important Information - The company recorded a significant land sale of $65 million, which helped offset some adverse impacts on revenue [20] - Claims expenses were elevated due to unfavorable developments from previous years, despite improvements in safety initiatives [21][80] Q&A Session Summary Question: Impact of merger-related business losses - Management indicated that the business losses related to the merger are primarily confined to intermodal and are expected to persist until the merger closes [27][28] Question: Cost structure management in a challenging environment - Management highlighted the need for careful management of costs while maintaining service quality, with a focus on productivity and fuel efficiency [35][36] Question: Coal RPU pressure and future expectations - Management clarified that while coal RPU pressure is expected to persist year-over-year, it may stabilize on a sequential basis [44][46] Question: Competitive responses and business retention - Management expressed confidence in retaining business with key customers due to superior service and network advantages, despite competitive pressures [52][56] Question: Revenue run rate and potential risks - Management acknowledged the risk of further volume loss but emphasized efforts to regain business through improved service and direct engagement with customers [96]

Financial Data and Key Metrics Changes - The operating ratio for the quarter was reported at 63.3, reflecting a 10-basis point improvement year-over-year [18][21] - Earnings per share were $3.30, with total costs impacted by various factors including a $13 million incident cost and $15 million in merger-related expenses [18][21] - Revenue increased by 2% year-over-year, but was approximately $75 million short of expectations due to macro headwinds and competitor responses [19][21] Business Line Data and Key Metrics Changes - Merchandise volume grew by 6% year-over-year, driven by strong performance in auto, chemical, and metals markets, while intermodal volumes decreased by 2% due to external market pressures [13][15] - Coal revenue was significantly impacted, with RPU less fuel down by 7%, primarily due to weakening seaborne coal prices [15][17] - The company achieved a 5.5% growth in merchandise carloads, alongside a 19% reduction in re-crews and a 12% decrease in intermodal train starts [10][19] Market Data and Key Metrics Changes - The intermodal market is facing challenges from trade and tariff uncertainties, as well as an oversupplied truck market, leading to softer import demand [16][17] - Coal prices remain pressured, with expectations of continued weakness in export coal markets, although utility demand is expected to support some segments [17] - The company anticipates volume pressure in intermodal segments due to intensified competitor activity related to the merger announcement [17] Company Strategy and Development Direction - The company is focused on maintaining safety and service while preparing for growth, particularly in light of the proposed merger with Union Pacific [6][22] - Norfolk Southern is committed to enhancing its operational efficiency, raising its cumulative efficiency target to approximately $600 million by 2026 [10][23] - The company is investing in technology and training to improve inspection and reliability, which is part of its broader strategy to transform operational performance [11][12] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the uncertain macroeconomic environment and the challenges posed by competitor reactions to the merger announcement [22] - The company remains optimistic about its path forward, emphasizing the importance of controlling costs and maintaining service quality [22][23] - Management highlighted the need to focus on safety and service as top priorities while navigating the competitive landscape [82] Other Important Information - The company recorded a significant land sale of $65 million, which helped mitigate some adverse impacts on revenue [19] - The third quarter saw improvements in safety metrics, with a 7.8% reduction in the FRA personal injury ratio and a 27.7% improvement in the train accident ratio [9] Q&A Session Summary Question: Impact of merger-related business losses - Management confirmed that the business losses related to the merger are primarily confined to intermodal and are expected to persist until the merger closes [25][26] Question: Cost structure management in a challenging environment - Management emphasized the importance of maintaining productivity and efficiency while managing costs, particularly in light of potential share loss [34][35] Question: Coal RPU pressure and future expectations - Management indicated that coal RPU pressure is expected to persist, with a potential stabilization in the near term but continued year-over-year declines [45][46] Question: Competitive responses and intermodal business retention - Management expressed confidence in retaining intermodal business due to strong service offerings and a well-established network, despite competitive pressures [51][53] Question: Integration risks with the merger - Management discussed strategies to mitigate integration risks, emphasizing the importance of maintaining service quality and operational efficiency during the merger process [103]

Financial Data and Key Metrics Changes - The operating ratio for the quarter was reported at 63.3%, reflecting a 10 basis point improvement year over year [28] - Revenue increased by 2% year over year, but the company expected approximately $75 million more revenue than reported due to macro headwinds and competitor responses [28][29] - Earnings per share were reported at $3.3 [28] Business Line Data and Key Metrics Changes - Merchandise volume grew by 6% year over year, driven by increases in auto, chemical, metals, and construction sectors [20] - Intermodal volumes decreased by 2%, impacted by trade uncertainties and competitor responses to the merger announcement [21][22] - Coal revenue per unit (RPU) decreased by 7%, primarily due to weakening seaborne coal prices [22] Market Data and Key Metrics Changes - The company noted a mixed outlook for manufacturing activity, with vehicle production expected to be challenged due to supplier disruptions [23] - Strong fracking activity in the Marcellus Utica Basin is supporting demand for natural gas liquids and sand [23] - The intermodal market is expected to face softer import demand due to tariff volatility and oversupplied truck capacity [24] Company Strategy and Development Direction - The company is focused on maintaining safety and service while preparing for growth, particularly in light of the proposed merger with Union Pacific [8][32] - Norfolk Southern is committed to enhancing its operational efficiency, raising its efficiency target to approximately $600 million by 2026 [15][33] - The company is investing in technology and training to improve inspection and reliability across its network [16] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that the macro environment remains uncertain, with unpredictable demand and competitive dynamics expected to create fluctuations in revenue [31] - The company is optimistic about future growth opportunities post-merger, emphasizing the importance of maintaining strong safety performance and service quality [32][33] - Management expressed confidence in their ability to regain lost business and improve service offerings despite current challenges [68][110] Other Important Information - The company achieved a quarterly record in fuel efficiency, with a 5% year-over-year gain [15] - A significant land sale at the end of the quarter contributed positively to financial results, totaling $65 million more than the previous year [29] Q&A Session Summary Question: Impact of merger-related business losses - Management confirmed that the business losses related to the merger primarily affected intermodal services and are expected to continue impacting revenue [35][36] Question: Cost structure management in a challenging environment - Management emphasized the importance of maintaining productivity and efficiency while managing costs, particularly in light of potential share loss [47][48] Question: Coal RPU pressure and future expectations - Management indicated that coal RPU is expected to remain under pressure, with year-over-year declines anticipated to persist [60][62] Question: Competitive responses and market dynamics - Management discussed the competitive landscape, noting that Norfolk Southern's strong service and network capabilities position it well to retain business despite challenges [66][68] Question: Integration risks from the merger - Management outlined strategies to mitigate integration risks, focusing on maintaining service quality and operational efficiency during the merger process [124]

Core Insights - The railroad company reported a profit of $711 million [1] - The company increased its productivity target to $200 million [1] Company Summary - The railroad company has agreed to sell itself to Union Pacific in July [1] - The reported profit indicates strong financial performance [1] - The increase in productivity target suggests a focus on operational efficiency [1]

Safety - The company's FRA Personal Injury Index has improved, reaching 2.22 in 2025 YTD, better than the 5-Year FY Average[13, 16] - The FRA Accident Rate also shows improvement, with a rate of 0.53 in 2025 YTD, better than the 5-Year FY Average[17] - The FRA Mainline Accident Rate has improved to 1.07 in 2025 YTD, also better than the 5-Year FY Average[16] Network & Operations - Network Update: Q3 2025 Intermodal Service Composite reached 92%, Merch Plan Compliance reached 89%[18] - The company has accelerated and exceeded cost take-out commitments under PSR 2.0, projecting ~$600 million in 2026, up from the original $150 million commitment[19, 20] - The company achieved an all-time quarterly fuel efficiency record[21] - The company is installing Premier Wheel Integrity System on busiest main lines, resulting in a 36% reduction in YoY Wayside Stops[24, 25] Financial Results - Q3 2025 total revenue reached $3,103 million, a 2% increase compared to Q3 2024[31] - Q3 2025 merchandise revenue was $1,969 million, a 6% increase compared to Q3 2024, with a volume of 595,100, a 6% increase[31] - Q3 2025 intermodal revenue was $759 million, a 1% decrease compared to Q3 2024, with a volume of 1,032,100, a 2% decrease[31] - Adjusted Q3 2025 EPS – diluted was $3.30, a $0.05 or 2% increase compared to Q3 2024[41]