Thomas Wadewitz, transportation analyst at JP Morgan Chase, told CNBC’s “Morning Call” that railroads should be able to increase rates, making the sector attractive to investors.
“I think the underlying factor which is important to consider is the pricing trend,” Wadewitz said Monday. “From more of a medium- to long-term basis, infrastructure constraints should enable the railroads to continue to take up prices at a pace well beyond historic (levels). That’s the key factor underlying the favorable view of the group.”
He said Union Pacific , like Burlington Northern Santa Fe , has access to Wyoming’s Power River Basin, a region of low-cost coal production.
He also likes CSX .