Avondale Cuts Estimates On Railroads... Again

On Friday, Avondale Partners issued a note on the railroad industry, highlighting companies including CSX Corporation

, Canadian National Railroad Company

, Canadian Pacific Railway Limited

, Norfolk Southern Corp.

, and Union Pacific Corporation

. Donald Broughton, a managing director at Avondale Partners, lowered the firm's estimates on the railroad companies amid signs of weak US exports due to a strong US dollar, lower volumes in fracking, lower fuel surcharges, and higher fixed costs in infrastructure. CNI: $80 price target with no rating available. "We are lowering our 1Q EPS estimate to C$0.96 from C$1.09, and further lowering our 2016 EPS estimate to C$4.69 from C$4.88." CP: Market Outperform with no price target available. "We are lowering our 1Q EPS estimate from C$2.20 to C$2.11, and increasing our 2016 EPS estimate from C$9.95 to C$10.10….We expect the risk in the current quarter to the downside as a result of macro-driven volume declines…" CSX: Downgraded to Market Underperform with a price target of $18. "We are lowering our 1Q EPS estimate from $0.37 to $0.32, and further lowering our 2016 EPS estimate from $1.75 to $1.65...We understand the company has made significant operational improvements, however, our ratings change is due to ongoing macro headwinds." NSC: OutPerform with a $65 price target "We are increasing our 1Q EPS estimate from $0.86 to $0.89, and lowering our 2016 EPS estimate from $5.00 to $4.95." UNP: Market Underperform with a $55 price target We are lowering our 1Q EPS estimate from $1.16 to $1.10, and further lowering our 2016 EPS estimate from $5.20 to $5.10." CSX is currently trading at $23.93. CNI is currently trading at $55.46. CP is currently trading at $124.59. NSC is currently trading at $72.76. UNP is currently trading at $77.69.