Valued at $65.5 billion by market cap, CSX Corporation (CSX) is a leading transportation company in the U.S., specializing in rail-based freight services. The Florida-based company operates an extensive network covering 26 states and Canadian provinces, serving multiple industries.
Shares of the railroad giant have significantly underperformed the broader market over the past 52 weeks. CSX has gained 3.7% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 26.7%. Meanwhile, in 2024, shares of CSX are down 3.3%, compared to SPX's 11.3% gains on a YTD basis.
Zooming in further, CSX is also lagging behind the S&P Transportation SPDR's (XTN) 8.9% gains over the past 52 weeks.
In the post-pandemic landscape, American spending habits have undergone a notable shift, moving away from purchasing goods and towards investing in services. This seismic change has created a ripple effect, intensifying pressure on rail-road giants like CSX. Compounding this challenge are global shipping delays, further squeezing margins.
Additionally, on April 17, CSK revealed its Q1 earnings results, which exceeded Wall Street projections on both revenue and profit. However, despite this positive outcome, investor response was muted, with shares showing minimal movement post-announcement. This lack of investors' excitement can be attributed to the Baltimore port closure in March, which is expected to negatively impact the company’s Q2 performance.
For the current fiscal year, ending in December, analysts expect CSX's EPS to grow by 5.4% to $1.95. The company’s earnings surprise history is strong. It beat or matched the consensus estimates in all of the last four quarters.
Among the 23 analysts covering CSX stock, the consensus rating is "Strong Buy,." That's based on 17 "Strong Buy" ratings, one "Moderate Buy," and five "Holds."
This configuration is slightly more bullish than three months before, with 16 analysts suggesting a "Strong Buy."
Following CSX's Q1 earnings report, on April 18, UBS maintained its "Buy" rating on the CSX but lowered its price target to $44, which is also the Street-high target and implies a potential upside of 31.3% from the current price levels. UBS's optimistic outlook for CSX is supported by anticipated strong volume growth and predicted margin improvements in the latter part of the year.
The mean price target of $39 represents a premium of 16.4% to CSX's current levels.
On the date of publication, Anushka Mukherjee did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
