Dividend.com: Burlington Northern Off Track

Burlington Northern Earnings May Derail

Burlington Northern Sante Fe (BNI Quote) shares are down nearly 6% today after Morgan Stanley downgraded the stock to underweight from equal-weight.

The analyst believes the railroad operator will not escape the drop in traffic for the industry, which is expected to fall 7.5% to 9% in the fourth quarter.

Much of the company's earnings success comes as a result of commodity strength. In the last quarter, agricultural products revenue rose 33%, while coal revenue rose 23%. The company does have a famous investor on board with Warren Buffett, reportedly holding a little over 70 million shares of Burlington Northern, or 20.47% of all the shares outstanding.

We had removed shares of Burlington Northern from our "Recommended" list back on Aug. 11, when shares were trading at $101.43. The company now has a dividend yield of 2.15%, based on last night's closing stock price of $74.58.

The stock does have technical support in the $54 area. If that fails to hold, we could see the $36 area as potentially the next stop below. On the flipside, if the shares can firm up and strengthen, the $81 to $85 area is the first level of overhead resistance, with $91 coming after that.

Burlington Northern Sante Fe Corporation is not recommended at this time, holding a Dividend.com Rating of 3.3 out of 5 stars.

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