Barclays on Rail/Ground Transportation: Coal Pressures Eastern Rails: Downgrading NSC, Upgrading UNP
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Price: $350.72 +1.18%
Rating Summary:
12 Buy, 26 Hold, 3 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
12 Buy, 26 Hold, 3 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Barclays on Rail/Ground Transportation: Coal Pressures Eastern Rails: Downgrading NSC, Upgrading UNP
Analyst, Brandon R. Oglenski, said, "Weak coal demand is challenging the earnings outlook for the eastern U.S. rails, CSX and NSC. The market has been quick to respond, sending both companies' shares materially lower, but we expect a slow coal recovery will remain an overhang for several quarters. We are downgrading Norfolk Southern (NYSE: NSC) to Equal Weight (from Overweight) as a result. On the other hand, solid pricing fundamentals and relatively stable western coal dynamics create a bright outlook for Union Pacific (NYSE: UNP)_, driving our upgrade to Overweight. Although CSX Corp (NYSE: CSX) also faces coal headwinds, we believe a lower valuation and forecast cost reductions this year provide some buffer for shareholders; we reiterate our Overweight rating on CSX."
Barclays lowers price target on NSC from $86 to $72, cuts FY12 EPS estimate from $5.85 to $5.50 and FY13 from $6.55 to $6.10.
Raises PT from $126 to $133, raises FY12 EPS estimate from $8.16 to $8.30 and FY13 from $9.20 to $9.30.
Lowers PT on CSX from $29 to $26, cuts FY12 EPS estimate from $1.95 to $1.80 and FY13 from $2.25 to $2.15.
Analyst, Brandon R. Oglenski, said, "Weak coal demand is challenging the earnings outlook for the eastern U.S. rails, CSX and NSC. The market has been quick to respond, sending both companies' shares materially lower, but we expect a slow coal recovery will remain an overhang for several quarters. We are downgrading Norfolk Southern (NYSE: NSC) to Equal Weight (from Overweight) as a result. On the other hand, solid pricing fundamentals and relatively stable western coal dynamics create a bright outlook for Union Pacific (NYSE: UNP)_, driving our upgrade to Overweight. Although CSX Corp (NYSE: CSX) also faces coal headwinds, we believe a lower valuation and forecast cost reductions this year provide some buffer for shareholders; we reiterate our Overweight rating on CSX."
Barclays lowers price target on NSC from $86 to $72, cuts FY12 EPS estimate from $5.85 to $5.50 and FY13 from $6.55 to $6.10.
Raises PT from $126 to $133, raises FY12 EPS estimate from $8.16 to $8.30 and FY13 from $9.20 to $9.30.
Lowers PT on CSX from $29 to $26, cuts FY12 EPS estimate from $1.95 to $1.80 and FY13 from $2.25 to $2.15.
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