Railroads Weekly Review: Norfolk Southern, CSX, Union Pacific
Railroad stocks took a beating last week, as Kansas City Southern (NYSE:KSU) lowered its revenue expectations on weak energy sector volumes and foreign exchange headwinds. In this review, we take a look at carloads for major U.S. railroads — Norfolk Southern (NYSE: NSC), CSX (NYSE: CSX), and Union Pacific (NYSE: UNP) – with a particular focus on their energy related commodities.
Norfolk Southern
Norfolk Southern’s coal carloads continued to decline, falling 18.9% in the quarter-to-date through May 9, compared to 17.6% in the quarter-to-date May 2. However, its quarter to date merchandise carloads grew 1% as a result of improvements in carloads of crushed stone, sand, gravel, grains, motor vehicles and petroleum products during the week ended May 9. [1] Norfolk Southern’s intermodal volumes grew at a moderate pace of 3.3% in the quarter-to-date through May 9.
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Norfolk Southern’s stock declined 3.0% over the week through Friday. We currently have a price estimate of $100 for Norfolk Southern. For 2015, we estimate revenues of $11.4 billion, compared to a consensus estimate of $11.1 billion, and EPS of $6.30, compared to a consensus estimate of $5.90.
Click here to see our complete analysis of Norfolk Southern.
Union Pacific
A marginal increase in Union Pacific’s petroleum products carloads during the week ended May 9 helped slow the decline in quarter-to-date petroleum carloads from 7% to 6%. [2] Carloads of commodities other than chemicals, motor vehicles, coke and waste were in the negative during the week, with coal suffering the heaviest decline at 28%. Union Pacific’s intermodal carloads growth moderated to 3% during the week ended May 9, compared to 6% during the previous week.
Union Pacific’s stock declined around 3.4% over the week through Friday. We currently have a price estimate of $104 for Union Pacific. For the year 2015, we estimate revenues of $24.4 billion, compared to consensus estimate of $24.0 billion, and EPS of $6.30, compared to a consensus estimate of $6.25.
Click here to see our complete analysis of Union Pacific.
CSX
CSX’s coal carloads declined 11% year-on-year in the quarter-to-date through May 9, relatively consistent with decline during the quarter-to-date May 2. [3] Coke carloads were up 18% in the quarter to date May 9. CSX’s petroleum products carloads, were up 9% in the quarter to date May 9, compared to 11% in the quarter-to-date May 2. In the week ended May 9, intermodal volumes grew 4%.
CSX’s stock declined 3.2% over the week through Friday. We currently have a price estimate of $30 for CSX. For the year 2015, we estimate revenues of $12.8 billion, compared to a consensus estimate of $12.5 billion, and EPS of $2.10, compared to a consensus estimate of $2.06.
Click here to see our complete analysis of CSX.
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- Norfolk Southern Carloading Report, www.nscorp.com [↩]
- Union Pacific’s 2015 Week 18 Carloading Report, www.up.com [↩]
- CSX’s 2015 Week 18 Carloading Report, www.csx.com [↩]