Wells Fargo Downgrades CSX (CSX) to Market Perform; See Less Flexibility And More Volume Risk

Wells Fargo downgraded CSX (NYSE: CSX) from Outperform to Market Perform with a price target range of $22-$24 from $23-25.

Wells analyst says, "Despite what we see as roughly similar valuations, relative to peers we feel CSX has less flexibility to adjust costs and modestly more risk to volume degradation, particularly from export coal. We are lowering our 2011E to $1.68 from $1.70 and 2012E to $1.85 from $1.90 (Street at $1.92 pre-earnings)...As previously noted, resources have been added to the network in order to return service to prior levels. Early progress is encouraging (although not convincingly at prior levels), but we think these efforts limit CSX’s ability to adjust resources if volume stagnates or slows further."

For more ratings news on CSX click here and for the rating history of CSX click here.

Shares of CSX closed at $21.05 yesterday.

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