CSX (CSX) stock is "well-positioned" based on the company's strong position under all potential rail merger scenarios, RBC Capital Markets said in a note Thursday.

If the Union Pacific (UNP) and Norfolk Southern (NSC) merger is approved and CSX is later acquired, the upside could be significant with a potential 33% increase in CSX's share value, the investment firm said.

Even if UNP/NSC is approved and CSX is not acquired, the company is expected to benefit from improved rail collaboration and higher earnings growth of about 15%, RBC said.

If the merger is not approved, analysts view the outcome as neutral for CSX, with little downside since this risk is likely already priced into the stock, according to the note.

Recent operational improvements at CSX support the bullish view as the company is working through major infrastructure projects like the Howard Street Tunnel and Blue Ridge upgrades, which are expected to boost network performance once completed, RBC analysts noted.

RBC upgraded CSX to outperform from sector perform and raised its price target to $39 from $37.

Price: 33.27, Change: +0.49, Percent Change: +1.51