** Stephens resumes coverage on U.S. railroad operators, with Union Pacific UNP.N and CSX CSX.O at "overweight" and Norfolk Southern NSC.N at "equal-weight" rating

** Brokerage says rising truckload rates could drive more freight to rail as shippers seek lower-cost transport options

** Adds that Union Pacific and Norfolk Southern merger review is moving forward, but approval is unlikely before the second half of 2027 despite the companies targeting a mid-2027 close

** Stephens says improving industrial demand could help merchandise volumes grow faster through 2027

** YTD, shares of UNP up ~22.4% , NSC rise ~11.8% and CSX jump ~33.8%