07/28/2025
๐๐๐ง ๐๐๐ข๐ฏ๐๐ซ: โ๐๐ง๐ญ๐ก๐ข๐ง๐ค๐๐๐ฅ๐โ ๐๐๐ซ๐ ๐๐ซ ๐๐ซ๐๐ฌ๐๐ง๐ญ๐ฌ ๐๐๐ซ๐ ๐ ๐๐๐ข๐ฅ ๐๐ฉ๐ฉ๐จ๐ซ๐ญ๐ฎ๐ง๐ข๐ญ๐ฒ
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A โcompletely unthinkableโ proposed merger could shake the foundation of the typically dormant rail industry, as a Trump-era regulatory environment may pave the way for a union between Norfolk Southern $NSC and Union Pacific $UNP.
In this clip from The Call @ Hedgeye, Industrials analyst Jay Van Sciver argues that the companies have a compelling caseโnot just to merge, but to do so in a way that improves freight transport times.
โThis would have been unthinkable for the last few decades,โ Van Sciver says.
โThe industry is already extremely consolidated. The rails are in their own regulatory framework in that theyโre a natural monopoly in a classic economic sense. Theyโre going to have a decent argument for regulators to make that case.โ
Still, as promising as the opportunity sounds, Van Sciver warns that if the deal is abandoned or blocked, both stocks could suffer sharp, short-term declines.
But if it goes through, the floodgates may open.
Van Sciver sees potential for a fresh wave of consolidationโthink Burlington and CSXโmarking a dramatic new chapter in an industry long defined by inertia.
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