** Shares of railroad operator Norfolk Southern NSC.N fall ~1% to $303.97 premarket after UBS downgrades rating to "neutral" from "buy"

** UBS says Q4 results, 2026 commentary point to weaker yields and operating ratio compared with brokerage's assumptions

** Says Surface Transportation Board’s rejection of merger application with Union Pacific UNP.N suggests the deal process could create a greater overhang on NSC stock

** However, UBS raises PT to $342 from $320.00, representing a ~12% upside to the stock's last close

** Says PT raise based on brokerage's PT for UNP of $253 along with $89 share cash consideration offered by UNP to purchase NSC

** 7 brokerages rate NSC "buy" or higher and 16 "hold"; their median PT is $305 - LSEG-compiled data

** In 2025 NSC shares rose 23%

(Reporting by Aatreyee Dasgupta)

((Aatreyee.Dasgupta@thomsonreuters.com))