CSX has a $62.5 billion market capitalization, compared to $58.7 billion for Norfolk Southern. Union Pacific is the largest of the three S&P 500 railroad stocks, with a $138.1 billion market cap. BofA also cited CSX's internal improvements in the upgrade, according to The Fly investment site.

Union Pacific is in talks to buy smaller rival Norfolk Southern, in a deal that would create a $240 billion coast-to-coast U.S. operator by value of combined stock and debt.