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

Railroad operator Union Pacific is exploring a deal to buy smaller rival Norfolk Southern , the Wall Street Journal reported, in a merger that would bolster the industry leader's heft and likely draw intense regulatory 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.