Railroads Weekly Review: Norfolk Southern, CSX and Union Pacific

-5.93%
Downside
37.31
Market
35.10
Trefis
CSX: CSX logo
CSX
CSX

In this review, we will be taking a look at carloads for major U.S. railroads – Norfolk Southern (NYSE: NSC), CSX (NYSE: CSX), and Union Pacific (NYSE: UNP). For railroads operating in the eastern U.S., Norfolk Southern and CSX, we expected to see some impact on carloads due to the bad weather experienced over the past month. However, it seems that the weather has got to Union Pacific as well. All three railroads reported declines across most commodities during the week ended February 21.

Norfolk Southern

Norfolk Southern’s carloading report revealed that only its petroleum product carloads were in the positive during the week ended February 21. Petroleum product carloads increased 38% year-on-year during that week and 24% in the quarter to date. [1] For the quarter to date as of February 21, carloads of crushed stone, sand and gravel were the highest growing commodities, with 34.5% year-on-year increase. As we pointed out last week, this growth is most likely due to poor comparables from the previous year’s first quarter.

Relevant Articles
  1. What’s Next For CSX Stock After A 12% Rise Last Year?
  2. What Next For CSX Stock After A 19% Fall In Q3 Earnings?
  3. Should You Pick Humana Over CSX Stock For The Next Three Years?
  4. CSX’s Top Line To Decline In Q2?
  5. Will CSX Stock Recover To Its Pre-Inflation Shock Level?
  6. Here’s What To Expect From CSX’s Q1

Norfolk Southern’s stock declined around 1.6% over the week through Thursday. We currently have a price estimate of $105 for Norfolk Southern. For the year 2015, we estimate revenues of $11.9 billion, compared to a consensus estimate of $11.6 billion, and EPS of $6.84, in line with consensus estimates.

Click here to see our complete analysis of Norfolk Southern.

Union Pacific

Unlike Norfolk Southern and CSX, Union Pacific’s petroleum products carloads declined during the week ended February 21. [2] Narrow spreads between Western Texas Intermediate (WTI), produced in the U.S., and Brent crude oil, which is sourced from the North Sea, and high crude production in the PADD 3 regions have eaten into Union Pacific’s crude oil carloads leading to a decline in its petroleum carloads. Carloads of construction related materials, such as crushed stone, sand, gravel and lumber and automobiles were in the positive during the week. During the quarter to date ended February 21, Union Pacific’s intermodal carloads declined 7% as a result of the extended labor contract negotiations between the ILWU and PMA.

Union Pacific’s stock declined around 2.3% over the week through Thursday. We currently have a price estimate of $105 for Union Pacific. For the year 2015, we estimate revenues of $25.3 billion, compared to consensus estimate of $25.0 billion, and EPS of $6.61, compared to a consensus estimate of $6.59.

Click here to see our complete analysis of Union Pacific.

CSX

CSX’s petroleum products, metallic ores and military, machinery and transportation equipment carloads were in the positive for the week ended February 21. [3] Petroleum product carloads grew 34% during the week and quarter to date. CSX’s coal carloads declined 39%, the heaviest of all commodities, during the week ending February 21.

CSX’s stock declined 3.5% over the week through Thursday. We currently have a price estimate of $28 for CSX. For the year 2015, we estimate revenues of $13.0 billion, compared to a consensus estimate of $12.9 billion, and EPS of $2.16, in line with consensus estimates.

Click here to see our complete analysis of CSX.

View Interactive Institutional Research (Powered by Trefis):

Global Large CapU.S. Mid & Small CapEuropean Large & Mid Cap
More Trefis Research

Notes:
  1. Norfolk Southern Carloading Report, www.nscorp.com []
  2. Union Pacific’s 2015 Week 7 Cardloading Report, www.up.com []
  3. CSX’s 2015 Week 7 Carloading Report, www.csx.com []