MW Trump's pick to lead Federal Railroad Administration a positive for railroad stocks, says analyst
By James Rogers
David Fink, the former president of Pan Am Railways, is 'carrier friendly,' according to TD Cowen
President-elect Donald Trump's decision to tap "carrier friendly" David Fink to be the next administrator of the Federal Railroad Administration is a positive for U.S. railroad stocks, according to TD Cowen analyst Jason Seidl.
Trump announced his choice of Fink in a post on Truth Social Sunday. "I am proud to announce that Highly Respected David Fink, a fifth generation Railroader, will be the next Administrator of the Federal Railroad Administration $(FRA)$," he wrote. "David will bring his 45+ years of transportation leadership and success, which will deliver the FRA into a new era of safety and technological innovation. Under David's guidance, the Federal Railroad Administration will be GREAT again. Congratulations to David!"
In a note released Monday, Seidl said that Fink's selection "came surprisingly early" and "is one that should be favorable to the U.S. carriers." The analyst echoed Trump in noting that Fink "has railroading in his blood."
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"We view this appointment as a positive for U.S. railroad stocks," Seidl said.
Fink is the former president of Pan Am Railways, which became part of CSX Corp. $(CSX)$ in 2022.
CSX shares are up 0.2% Monday, while Norfolk Southern Corp.'s stock $(NSC)$ is down 0.2%. Union Pacific Corp. shares $(UNP)$ are down 0.4% and Canadian Pacific Kansas City Ltd. shares $(CP)$ are down 0.3%. Canadian National Railway Co. shares $(CNI)$ are down 0.5%.
"The appointment is important for the rail industry as the FRA is the organization that oversees the creation/enforcement of rail safety regulations, administers railroad funding, and researches technologies for rail operational improvement," Seidl added. "The FRA was the organization that required railroads to have a minimum of two-person crews earlier this year (although some exceptions were allowed). This was a setback for many in the rail industry that hoped technological advancements could bring about 1-person crews for non-hazardous moves (the technology for which the Class Is have possessed for a long time)," he wrote.
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"This appointment must be approved by the Senate but has already gotten some important industry endorsements from the American Short Line and Regional Railroad Association (ASLRA) and the Amtrak CEO," Seidl wrote.
"David Fink's extensive railroad and transportation experience makes him a great candidate for Administrator of the Federal Railroad Administration. Amtrak successfully collaborated with David on safety, technology, and passenger train performance while he led Pan Am Railways," Amtrak Chief Executive Stephen Gardner said in a statement Sunday.
In his note, Seidl said that the timing of Fink's nomination could be significant, noting that during his previous administration, Trump did not appoint anyone to the FRA until about seven months into his term. "It could also signal that a Surface Transportation Board $(STB.UK)$ appointment is next for President Trump (something that took him over a year in his first term)," Seidl wrote.
-James Rogers
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December 23, 2024 11:33 ET (16:33 GMT)
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