Transport stocks have been hit in recent market sales, with investors fearing that inflation will hurt shipping demand while increasing costs for gas and drivers. This combination is not a good recipe to increase earnings.
Railroad stocks fell again on Thursday after adding a downgrade to investors’ concerns.
Citigroup analyst Christian Weatherby down shares
(UNP) must be held bye.
Its CSX price target has been reduced from 45 to $ 35 per share. His Union Pacific target went from $ 287 to $ 235 per share. And its Norfolk target was lowered from $ 345 to $ 260 per share.
“While the general trend across transport is relatively stable, the pockets of weakness are isolated. [truck load] With spot rates and e-commerce package volumes, we think it’s wise to factor in more cautious scenarios for 2023, “Weatherby wrote.
But the highest expected revenue in the rail transport sector has risen, and other transport stocks have not recovered. This combination convinces Weatherby that there are better values elsewhere under its coverage.
For example, he rates
(FDX) Buy shares. Its price target for that stock is $ 270.
Coming on Thursday trading, FedEx stock has fallen nearly 21% this year. CSX, Norfolk and Union Pacific – Canadian-based railways, including the Canadian Pacific Railway (CP) and the Canadian National Railway (CNI) – fell by about half on average.
Trains were hit even harder in premarket trading on Thursday. FedEx stock was down about 0.4%. CSX shares fell 2%. Union Pacific shares fell 2.1%, and Norfolk stock fell nearly 2.7%.
The market is weak again.
Dow Jones Industrial Average
Futures are down 1.2% and 1.1%, respectively.
S&P fell 4% on Wednesday and
Dow Jones Transportation Average
A painful 7.4% fell. The transportation index, which includes railways, truckers, airlines and other logistics suppliers, is down about 17% and about 25% from the November 52-week high. It carries market area for the sector, down more than 20% from recent highs.
With the downgrade, 67% of analysts are buying CSX stock rate shares, Union Pacific Buy at 70% and Norfolk shares at 56%. The average buy-rating ratio for stocks in the S&P 500 is about 58%. U.S. railways, as a whole, are a little more popular than Canadian-based railways. The buy-rating ratio of Canadian Pacific Railways is 58%, but the Canadian National Railway rate is only 28% of analysts covering the share.
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