The Zacks Analyst Blog Highlights: Alpha Natural Resources, Walter Energy, CSX, Norfolk Southern and Union Pacific

Sep 23, 2011, 09:30 ET from Zacks Investment Research, Inc.

CHICAGO, Sept. 23, 2011 /PRNewswire/ -- announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Alpha Natural Resources (NYSE: ANR), Walter Energy (NYSE: WLT), CSX Corporation (NYSE: CSX), Norfolk Southern (NYSE: NSC) and Union Pacific (NYSE: UNP).


Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter:

Here are highlights from Thursday's Analyst Blog:

Coal Demand Worries for Railroads

Despite the impacts of inclement weather and staggering fuel prices, U.S. Railroads saw strong momentum in the first half of 2011 primarily driven by higher coal volumes. Coal shipments, which accounted for approximately 40% of the total railway shipment, led to positive market sentiments.

However, a suggested decline in coal shipments for the second half of the year by Alpha Natural Resources (NYSE: ANR) and Walter Energy (NYSE: WLT) is having a ripple effect on the rail industry.

The negative market reaction resulted in steep declines in share prices. Major players like CSX Corporation (NYSE: CSX) and Norfolk Southern (NYSE: NSC) plunged 8.1% and 8.3%, respectively, followed by Union Pacific (NYSE: UNP) which sank 6%.

The recent news comes as a big blow to rail companies as they banked mostly on these coal producers for shipments to domestic as well as international markets. Coal miners were optimistic on the long-term demand for coal given the emerging position of U.S. as coal export hub.

Global supply constraints for export coal due to disruptions in Australia and the growing demand for coal in Asian countries for steel manufacturing lifted the market position of the U.S. 

However, the current global volatility that affected mining activities, the sudden drop in demand from the Asian markets sighting problems over quality along with harsh weather conditions in the Pacific region have resulted in a major setback for these coal companies. Lower natural gas prices and higher utility stockpile levels have also raised their concerns.

For second half of the year, Alpha has reduced its estimated shipments to 102.5–109.5 million tons from 104–112 million tons guided previously. Even Walter expects metallurgical coal sales volume of around 5.2 million, down from the previous expectation of 5.9 million.

We are yet to see changes in predictions by railroads like CSX and Norfolk. Both companies still stick to their investment plans and export projections. In fact, for the full year, CSX had raised its capital plan from $2 billion to $2.2 billion and Norfolk had set a higher export goal based on approximately 5% increase in global steel production.

What lies ahead for the railroad companies in the backdrop of a fluctuating economy and raised expectations, is to be watched out for. Several legal battles will also add to the woes for an industry that has started to rebound.

We are currently maintaining a long-term Outperform recommendation on Norfolk with a Neutral recommendation on CSX Corp., Union Pacific and Kansas City.

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter:

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today:

About Zacks is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leon Zacks. As a PhD from MIT Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at

Visit for information about the performance numbers displayed in this press release.

Follow us on Twitter:

Join us on Facebook:

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Media Contact
Zacks Investment Research
800-767-3771 ext. 9339

SOURCE Zacks Investment Research, Inc.