In a report released today, Thomas Wadewitz from UBS maintained a Buy rating on CSX, with a price target of $41.00.
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Thomas Wadewitz has given his Buy rating due to a combination of factors that create a favorable outlook for CSX. The stock has experienced a 12% decline recently, partly due to Berkshire Hathaway’s lack of interest in railroad acquisitions. This decline sets a lower valuation bar, with CSX trading at 17 times its estimated 2026 earnings per share, below its five-year average P/E ratio of 18 times. Additionally, CSX is poised for growth through new service agreements with BNSF and improvements in service performance compared to earlier challenges.
Furthermore, the introduction of a new intermodal service with BNSF presents opportunities for market share gains, particularly in transcontinental domestic volume. This could lead to an increase in earnings per share if a significant portion of JBHT’s volume shifts from NSC to CSX. Improved network operations and service metrics also provide a strong foundation for volume growth, with trip plan compliance showing marked improvement. Overall, these factors, combined with a valuation below historical averages, support the Buy rating for CSX.
In another report released on September 2, Jefferies also maintained a Buy rating on the stock with a $38.00 price target.