Railroads Weekly Review: Norfolk Southern, CSX, Union Pacific
Railroad stocks were again bearish last week after seeing some stability in the prior week. Stocks are declining as a result of concerns over energy sector volumes, which had earlier led Kansas City Southern to lower its revenue guidance. Energy sector volumes include commodities such as coal, coke, and crude oil. In this review, we take a look at the carloads for Norfolk Southern (NYSE: NSC), CSX (NYSE: CSX), and Union Pacific (NYSE: UNP) for the quarter to date ended May 23, with a particular focus on their energy-related commodities.
Norfolk Southern
According to Norfolk Southern’s carload report, its coal carloads maintained their decline of 19% year-on-year from the previous week in the quarter to date ended May 23. [1] Coke carloads were up 6% in the quarter to date May 23, compared to 6.5% in the quarter to date May 16. Norfolk Southern’s petroleum products carloads, which includes crude oil, were up 33% in the quarter to date May 23, mostly consistent with the previous week. In the week ended May 23, intermodal volumes grew 3%, about consistent with the previous week.
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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
Union Pacific’s petroleum products carloads declined 2% year-on-year in the quarter to date May 23, compared to 4% year-on-year in the quarter to date May 26. [2] Its coal carloads declined 24% in the quarter to date May 23, while coke carloads were up 21%. Now that the labor contract negotiations between the ILWU and PMA have ended and a formal contract has been signed, Union Pacific’s intermodal carloads have recovered, with a 4% increase during the quarter to date May 23.
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 $23.8 billion, and EPS of $6.30, compared to a consensus estimate of $6.18.
Click here to see our complete analysis of Union Pacific.
CSX
CSX’s coal carloads declined 10.5% year-on-year in the quarter to date May 23, compared to 10% year-on-year in the quarter to date May 16. [3] Coke carloads were down 15% in the quarter to date May 23, compared to 17% in the quarter to date May 16. CSX’s petroleum products carloads were up 7% in the quarter to date May 23, compared to 9% in the quarter to date May 16. Intermodal volumes grew 1% during the week ended May 23, compared to 3% during the week ended May 16.
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 $2.05.
Click here to see our complete analysis of CSX.
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Notes:
- Norfolk Southern Carloading Report, www.nscorp.com [↩]
- Union Pacific’s 2015 Week 20 Carloading Report, www.up.com [↩]
- CSX’s 2015 Week 20 Carloading Report, www.csx.com [↩]