Citi analysts have upgraded U.S. rail stocks CSX Corp., Norfolk Southern, Union Pacific, and Knight Transportation to Buy. They believe transport fundamentals are running near lows for this cycle and a second-derivative improvement in the second half of 2023 will be a catalyst. The analysts have also increased the price targets for each stock, citing an upside to valuation and stock prices as the 2024 recovery story builds. They believe the U.S. rails are more closely tied to changes in the truck market than previous cycles, and are calling for an early cycle trade.
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