CSX Corporation Faces Headwinds Despite Robust Market Position
Freight Railroad Giant Struggles Amidst Competitive Challenges
With a market cap of $64.9 billion, CSX Corporation (CSX), based in Jacksonville, Florida, stands out as a prominent transportation company in the U.S. Its rail network, covering about 20,000 route miles, links major population centers across 26 states, Washington D.C., and parts of Canada.
Typically, companies valued at $10 billion or more are categorized as “large-cap” stocks, and CSX fits comfortably within this group. The firm primarily operates through its subsidiary, CSX Transportation, providing services like intermodal transportation, rail-to-truck transfers, and bulk commodity handling.
Despite its stature, CSX has experienced a decline of 16.1% from its 52-week high of $40.12 reached in February. Over the past three months, CSX shares have shown only marginal increases, falling short when compared to the Nasdaq Composite’s ($NASX) impressive 13.3% gain.
Looking at the bigger picture, CSX is down 2.9% year-to-date, trailing behind the NASX’s remarkable 32.6% increase. Furthermore, in the last 52 weeks, shares of CSX have only risen 1.4%, whereas NASX has surged nearly 37% during that same period.
Even with these challenges, CSX has maintained trading levels above its 50-day and 200-day moving averages since early October.
On October 16, CSX shares fell by 6.7% following disappointing Q3 earnings results. The company reported earnings per share of $0.46, missing the expected $0.48. Additionally, revenue came in at $3.6 billion, falling short of the $3.7 billion forecast. Contributing factors included a decline in coal and intermodal revenue per unit, influenced by low natural gas prices and fierce competition within the trucking sector. Investors are also wary of CSX’s Q4 outlook, which anticipates a revenue drop of $200 million due to weak coal markets, decreased fuel prices, and disruptions caused by hurricanes.
In contrast, rival Norfolk Southern Corporation (NSC) has reported stronger performance. Over the past year, Norfolk Southern shares have increased 11.7%, experiencing a 5.1% gain year-to-date.
Despite CSX’s recent challenges, analysts are moderately optimistic about its future. A consensus rating among 24 analysts covering the stock is “Moderate Buy,” with CSX currently trading below the average price target of $38.86.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are intended solely for informational purposes. For more details, please review the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Nasdaq, Inc.
