The Point for North America

Research evidence excerpt

The Point for North America

North America Railroads - UP-NS faces difficult challenge in STB response:

Thoughts on walking the line to protect merger synergies

Union Pacific and Norfolk Southern both report earnings on Thursday (7/23). We

find it noteworthy (and likely not coincidental) that both companies will report on

the same day for only the fourth time since 2018. As discussed in our 2Q26

preview, we expect strong results from both rails, with a compelling pricing

opportunity extending into 2027. Nevertheless, the focus of earnings will likely be

on the pending response to the STB’s request for additional information following

the conditional approval of its initial merger application. We believe there is a good

chance that UP-NS will file its second response Thursday morning pre-earnings.

STB has presented UP-NS with a difficult challenge in recommending appropriate

remediation if it falls short of its targets post-merger. We consider possible

responses, with a view that UP-NS taking a more aggressive stance would help

protect synergies, despite a potentially more contentious review process.

Ariel Rosa | Ben Mohr | Adrian Baran

Pro Forma Rail Share (UP-NS does not exceed Potential North American (US + Canada) Rail

50% based on AAR data) Share Including Synergies

Pettinari on Paper & Packaging - Previewing CCK, SON, PKG & AMBP; SBS Prices

Rise, URB Rolls Flat

In our weekly we highlight items of interest for Paper & Packaging investors:

Anthony Pettinari

Citi Quant Crowding Scores Packaging vs. S&P 500 NTM EBITDA Multiple

Short HighRanking= EarningsMOM Expensive InterestLower Short ConsensusBuy HigherMacroRisk

M/M Crowding

Crowding

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