NEW YORK (TheStreet) -- Shares of CSX Corp. (CSX) are down 3.48% to $35.22 amid market concerns surrounding the shale by rail risk following OPEC's decision to sustain its production at 30 million barrels per day, Goldman Sachs analysts said.
The rail-based transportation services company is part of the group affected by OPEC's announcement on November 27 that seems to have triggered a sell-off in Class I rail stocks on the following day, with the sector pulling back 5% on average, analysts said.
"Crude by rail represents only about 3% of industry volumes. However, the shale value chain is more meaningful when taking into consideration shipments of frac sand, pipes and equipment" analysts noted.
"Petroleum and related products coupled with aggregates (a frac sand proxy) represent an estimated 5% of total Class I rail carloads. Moreover, combined, these two commodities comprise 20% of the incremental carload growth year to date," analysts added.
Separately, TheStreet Ratings team rates CSX CORP as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate CSX CORP (CSX) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, revenue growth, reasonable valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow."