North America Transportation: 2Q26, Preview

Research evidence excerpt

North America Transportation: 2Q26, Preview

Barclays | North America Transportation

earnings calls. We see the most upside for UNP, CSX, KNX, XPO and GXO, as discussed further in

this note.

Railroad earnings will be defined by strengthening volumes on easier comps, pricing gains

and generally improved operational outcomes. M&A will still be in the forefront as Union

Pacific is preparing to respond to the supplemental information requested by the STB next

month. However, on a standalone basis, Union Pacific results are likely to beat expectations

given higher volumes and pricing gains despite some investor concerns to the contrary

surrounding domestic competition. We are also optimistic for CSX, as incentive comp will be a

headwind in the second quarter, but improved operations and volume gains are likely to

support strong incremental profitability in the back half of 2026. Canadian Pacific Kansas City

has been incrementally cited by investors as positioned less favorably within the group given

recent challenges with coal volumes, but we expect management to provide a robust forward

outlook. On the other hand, investors have incrementally commented on a likely more

favorable outlook developing for Canadian National, as stronger volumes and solid operations

should exceed management’s prior outlook for roughly flat volume expansion and slightly

better earnings in 2026 (although we expect the company to still err on the side of conservatism

when guiding 2H26 expectations). For Norfolk Southern, higher volumes have presented some

operational challenges for the carrier with a new operational leader named during the quarter;

nonetheless, we expect similar favorable management commentary on volume and pricing.