Aurizon Holdings Ltd (ASX: AZJ) is a rail haulier of coal from mine to port in QLD and NSW. It also owns railway track infrastructure in the Central Queensland Coal Chain, a regulated asset that provides track access to operators. 

Yesterday, investors were heavily selling the rail freight operator's shares. This was due to an  update after the market close on Tuesday. According to the AFR, the company plans to slash as many as 200 jobs. 

Including yesterdays drop, Aurizon shares are now down 9.23% since the start of the year. 

For context, S&P/ASX 200 Industrials (ASX:XNJ) is up 4% in that same period. 

What is Macquarie saying about Aurizon shares?

At the time of writing, Aurizon shares are trading at $2.95 each. 

Macquarie placed a "neutral" rating and price target of $3.32. This indicates a 12.54% upside. 

According to the report: 

March quarter in AZJ traditional above and below rail business has been tough with exports volumes down 11% for CQCC and 4.4% for HVCC. It is unlikely the system will be able to recover the lost 5-8mt of volume, such that our expectation is dragged lower.

Essentially, two of the major regions for the company – Central Queensland and the Hunter Valley – moved significantly less coal than usual.

Because of this drop, Macquarie believes the company probably won't be able to catch up on those lost volumes for the rest of the year. That means lower revenue and profits than previously expected, so they've reduced their outlook for the company.

The broker also said 3Q is always variable given cyclones, and this year the weather hurt coal volumes.

We still struggle to see evidence the bulk strategy is delivering, and until it does it is the yield of 6- 7% that will support the share price.

Looking ahead, according to Macquarie, Aurizon's strategy is to double the size of its Bulk business, while minimising revenue from haulage of thermal coal to below 20% of above rail revenue by 2030.

What are other brokers saying?

Bell Potter has a "hold" recommendation and target price of $3.30, indicating there is some upside. 

Back in February, the broker said: 

Earnings pressures are being managed through operational reviews and customer engagement amid stable coal demand. The focus remains on enhancing margins while capturing growth opportunities in the Bulk and containerised freight segments.

Elsewhere, online broker platform SelfWealth has an average target price of $3.40 and Trading View also has a 12 month price target of $3.40.