The rails sector is on high alert following reports that Union Pacific (UNP) is focused on acquiring Norfolk Southern (NYSE:NSC), which could create the nation's first coast-to-coast rails network if the deal cleared regulatory and White House scrutiny.

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 reportedly considering acquiring a rival railroad, sending shares of CSX and Norfolk Southern higher.