CSX (CSX) Shares Lower as Bernstein Cuts to Underperform

Shares of CSX (NYSE: CSX) are down about 0.5 percent at last check Tuesday afternoon following an earlier downgrade from Market Perform to Underperform by Bernstein's David Vernon. The analyst reduced his price target on the stock from $22 to $18.

Vernon cited "heavy" pressure on coal volumes at the Eastern rails given increased natural gas consumption. The analyst is modeling for coal volumes to be down "sharply" going forward, with an expected "partial" recovery by next year.

Vernon sees CSX's utility coal tonnage falling by about 16-19 percent from 2011 this year, equating to an estimated 7-8 percent year-over-year headwind for earnings. The analyst sees a 14-16 percent decline in utility coal tonnage at Norfolk Southern (NYSE: NSC) and a 6-8 percent decline in tonnage for Union Pacific (NYSE: UNP).

With CSX shares last trading at $20.54, Vernon's new price target represents potential downside of about 12 percent.

For an analyst ratings summary and ratings history on CSX click here. For more ratings news on CSX click here.

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