Q2 Rail Preview

Research evidence excerpt

Q2 Rail Preview

TD SECURITIES (USA) LLC INDUSTRY UPDATE

July 10, 2026

■Airfreight & Surface Transportation: Rail Q2 Rail Preview

Jason H. Seidl THE TD COWEN INSIGHT

646 562 1404

We adjust our U.S. Class I estimates higher, sitting above consensus heading into Q2 earnings.

jason.seidl@tdsecurities.com

Outperformance on volumes, an acceleration in the industrial economy, and OTR pricing

Elliot Alper positions the group well into 2H. All eyes on the merger as we await UNP's next filing deadline

646 562 1403 by 7/27.

elliot.alper@tdsecurities.com

Uday Khanapurkar, CFA Estimate Changes

646 562 1362

uday.khanapurkar@tdsecurities.com

Price Target Changes

CSX $46.00 (Prior $45.00)

Source: Company Reports, FactSet, TD Cowen

Where We Stand

U.S. rail volumes were up nearly 5% in Q2, driven by broad strength in Ag products, metallic

ores & minerals, and intermodal. The rails hummed in Q2 as service continues to be strong

(though panelists on our rail panel called out service deterioration in the past month) and

carloadings exceeded expectations for all three U.S. Class Is. We raise estimates above

consensus for CSX, NSC, and UNP. Industrial strength has picked up in Q2, with channel

checks indicating an acceleration of demand through Spring across a wide range of industrial

categories. Panelists on our rail roundtable call attributed the strength primarily to energy

demand and data center construction, partially offset by a weak housing market (lumber,

pulp/paper are both seeing softness). Most panelists were pessimistic coming into '26 and are

now bullish on demand trends for the back half of the year.

We expect strong intermodal numbers for the Class Is and IMCs. Truck to rail conversions

have been visible, primarily due to fuel prices.