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CSX (CSX)
NASDAQ:CSX
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CSX
(NASDAQ:CSX)
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Rating:67Neutral
Price Target:
$46.00
â–²(8.72% Upside)
Action:ReiteratedDate:01/24/26
The score is driven primarily by solid financial quality anchored by strong cash flow, offset by weakening revenue/margins and elevated leverage. Technicals are moderately supportive with price above key moving averages, while valuation is less compelling (P/E ~23 with a modest yield). Earnings call guidance is optimistic on margin and free cash flow, but execution and near-term demand/yield pressures temper the outlook.
Positive Factors
Free Cash Flow Strength
CSX's strong cash generation is a durable advantage: FCF rebounded materially and in 2025 matched net income, supporting capital discipline, dividend capacity and debt paydown. Reliable cash conversion underpins flexibility to fund productivity programs and weather cyclicality over multiple quarters.
Extensive Network & Scale
A 21,000-mile network across 23 states creates high switching costs and route density advantages. This scale yields cost efficiencies, broad customer access, and barriers to entry, supporting durable competitive positioning in freight logistics and making service improvements and pricing leverage more sustainable over time.
Operational & Intermodal Momentum
Intermodal volume and revenue gains, coupled with improved fluidity metrics and safety, reflect structural service improvements and customer wins. Higher-quality service and faster transit create durable demand advantages, helping diversify revenue mix toward growing, lower-cost-to-serve segments over the medium term.
Negative Factors
Elevated Leverage
Leverage near 1.4x reduces financial flexibility and raises sensitivity to earnings volatility. In a cyclical freight market, higher debt limits the firm's ability to invest opportunistically, accelerate buybacks, or absorb prolonged weak volumes without constraining strategic initiatives or increasing refinancing risk.
Revenue & Margin Deterioration
Sustained revenue declines and meaningful margin compression point to structural pressure from mix, pricing and commodity cycles. Lower margins weaken free cash flow sensitivity to revenue shocks and mean management must deliver sustained productivity to restore prior profitability levels over multiple quarters.
Execution & Mix Risk
Management's margin and FCF targets depend on executing 100+ initiatives while facing a shift into lower-RPU intermodal/minerals. That combination raises multi-quarter execution risk: if productivity programs lag or mix shift persists, margin recovery and FCF expansion could be delayed, stressing strategic plans.
CSX (CSX) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$76.91B
Dividend Yield1.42%
Average Volume (3M)13.57M
Price to Earnings (P/E)26.8
Beta (1Y)0.72
Revenue Growth-3.80%
EPS Growth-17.32%
CountryUS
Employees23,400
SectorIndustrials
Sector Strength72
IndustryRailroads
Share Statistics
EPS (TTM)0.39
Shares Outstanding1,859,556,800
10 Day Avg. Volume11,555,281
30 Day Avg. Volume13,570,671
Financial Highlights & Ratios
PEG Ratio-1.67
Price to Book (P/B)5.13
Price to Sales (P/S)4.79
P/FCF Ratio39.49
Enterprise Value/Market Cap1.25
Enterprise Value/Revenue6.83
Enterprise Value/Gross Profit20.54
Enterprise Value/Ebitda15.29
Forecast
1Y Price Target
$39.23Price Target Upside-7.28% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering13
EPS Forecast (FY)1.85
Revenue Forecast (FY)$14.49B
CSX Business Overview & Revenue Model
Company DescriptionCSX Corporation, together with its subsidiaries, provides rail-based freight transportation services. The company offers rail services; and transportation of intermodal containers and trailers, as well as other transportation services, such as rail-to-truck transfers and bulk commodity operations. It transports chemicals, agricultural and food products, automotive, minerals, forest products, fertilizers, and metals and equipment; and coal, coke, and iron ore to electricity-generating power plants, steel manufacturers, and industrial plants, as well as exports coal to deep-water port facilities. The company also offers intermodal transportation services through a network of approximately 30 terminals transporting manufactured consumer goods in containers; and drayage services, including the pickup and delivery of intermodal shipments. It serves the automotive industry with distribution centers and storage locations, as well as connects non-rail served customers through transferring products, such as plastics and ethanol from rail to trucks. The company operates approximately 19,500 route mile rail network, which serves various population centers in 23 states east of the Mississippi River, the District of Columbia, and the Canadian provinces of Ontario and Quebec, as well as owns and leases approximately 3,500 locomotives. It also serves production and distribution facilities through track connections. CSX Corporation was incorporated in 1978 and is headquartered in Jacksonville, Florida.
How the Company Makes MoneyCSX generates revenue primarily through its freight transportation services. The company charges customers for the transportation of goods via rail, with rates varying based on the type of cargo, distance, and service level. Key revenue streams include coal transport, which remains a significant portion of its business, intermodal freight services that involve transporting shipping containers, and bulk commodities like agricultural products. Additionally, CSX has developed partnerships with various logistics companies and industries that enhance its service offerings, allowing for more integrated solutions. The company also benefits from economies of scale due to its extensive rail network, which helps in reducing operational costs and improving profitability.
CSX Key Performance Indicators (KPIs)
Any
Revenue by Segment
Highlights revenue from different business segments, showing which areas drive growth and profitability, and indicating strategic focus or potential vulnerabilities.
Highlights revenue from different business segments, showing which areas drive growth and profitability, and indicating strategic focus or potential vulnerabilities.
Data provided by:
The Fly
The FlyCSX Earnings Call Summary
Earnings Call Date:Jan 22, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 22, 2026
Earnings Call Sentiment Negative
The call balanced significant near-term challenges with actionable management responses. Q4 showed modest volume growth and notable intermodal strength plus clear operational and safety improvements, but results were materially weakened by a steep 97% decline in operating income and EPS, revenue and yield pressures (mix and coal pricing), and one-time charges and expense increases. Management provided specific cost savings programs (100+ initiatives), non‑recurring charge clean-up, capital discipline (CapEx < $2.4B) and ambitious margin targets (200–300 bps improvement) and FCF growth guidance (≥50%), but execution risk and a soft macro/inventory backdrop limit visibility. Given the severity of the reported earnings decline and ongoing market headwinds offsetting the positives and plans, the overall tone is cautiously negative.Q4-2025 Updates
Positive Updates
Modest Volume Growth and Intermodal Strength
Total company volume increased 1% in Q4. Intermodal revenue grew 7% year over year on a 5% increase in volume, driven by new domestic and international wins and faster transit times.
Safety and Operational Improvements
Full-year declines in FRA injury and accident rates with Q4 posting the year's best metrics. Fluidity metrics (velocity, CarsOnline, dwell, trip plan compliance) showed substantial improvement from Q1 to Q4, indicating stabilized, higher-quality service.
Cost Actions and Productivity Initiatives
Management identified well over 100 diverse savings initiatives across the company targeting labor, PS&O, outside/professional services, asset utilization and discretionary spend. Guidance implies 200–300 basis points of operating margin expansion in 2026 driven by workforce optimization and tighter discretionary expense management.
Non-Recurring Charges Mostly Addressed / One-Time Items
Company disclosed approximately $50 million of Q4 charges ($31 million separation costs, $21 million technology impairments). Management also cited roughly $150 million of unique 2025 charges (severance, tech write-offs, network/Howard Street/Blue Ridge-related costs) that are not expected to repeat in 2026.
Capital Discipline and Free Cash Flow Outlook
2026 capital spending planned below $2.4 billion (a substantial reduction versus prior year) with free cash flow expected to grow at least 50% versus 2025 due to higher earnings, a more normalized cash tax rate and lower CapEx.
Coal Domestic Recovery and Select Commodity Strength
Coal volume increased 1% in Q4 with domestic tonnage up 6% (support from higher power demand and rising natural gas prices). Fertilizer volume increased 7% and minerals shipments remained supported by infrastructure activity.
Howard Street / Infrastructure Progress
Howard Street: first of two bridges raised enabling eventual double-stack capability; customers are bidding now for volume expected to begin moving double-stack through the tunnel in Q2. Blue Ridge project complete, improving network capability.
Leadership and Governance Reset
Renewed leadership team and compensation emphasis on a narrow set of high‑impact metrics (operating income / margin, safety, and long-term return on capital) to drive fiscal responsibility and disciplined execution.
Operational Preparedness and Storm Response
Management highlighted stronger network condition and detailed storm preparedness (senior coverage, snow/tree clearing, generators, modified operating plans) relative to prior-year weather disruptions, aiming for faster recovery and less persistent disruption risk.
Negative Updates
Sharp Decline in Operating Income and EPS
Reported fourth-quarter operating income and earnings per share fell by 97% year over year versus adjusted prior-year figures, indicating a severe near-term earnings setback.
Revenue and Yield Pressure
Total revenue declined 1% in Q4 despite 1% volume growth; total revenue per unit declined ~2% driven by negative mix and weaker export coal pricing. Coal revenue down 5% with coal RPU down ~6% year over year (met coal benchmark weakness and widened East Coast/Australia discounts).
Merchandise and Several Commodity Weaknesses
Merchandise franchise: volume and revenue both down 2%. Chemicals volume down 6%, forest products down 11%, and automotive volume down 5%, reflecting soft industrial demand and plant closures.
Rising Expenses and Q4 Charges
Fourth-quarter expenses increased by $73 million (≈3%) excluding the 2024 goodwill impairment. Q4 included roughly $50 million of charges (separation and tech impairments). Management also cited additional unique 2025 charges (~$150 million) that weighed on results.
Labor Cost and Overtime Pressure
Labor inflation persists with an expected union wage increase near 3.75% and overall inflation in the 3–3.5% range cited; overtime remains a focus as a controllable cost pressure requiring better visibility and tools.
Limited Near-Term Macro Visibility
Management expects a soft macro and industry backdrop with 'no short-term catalyst' to materially lift major industrial markets; revenue guidance for 2026 assumes only low single-digit growth and visibility is limited.
Execution Risk and Timing Uncertainty for Margin Targets
Management committed to 200–300 bps of OR improvement in 2026 but emphasized need for sustained execution and multiple quarters of proof; timing to reach 'best-in-class' levels remains uncertain.
Segmental Mix Headwind
Expected 2026 growth skewed toward lower-RPU segments (intermodal, minerals, fertilizers) while higher-RPU segments (forest products, chemicals, certain metals) face headwinds, creating mix-related pressure on overall yields.
Industry Merger Uncertainty
A major industry merger is under regulatory review and creates an external source of uncertainty; management is focused on running CSX well irrespective of the outcome but acknowledged potential longer-term competitive/strategic implications.
Company Guidance
CSX guided 2026 to low single‑digit revenue growth (assuming flat industrial production, modest GDP growth and fuel/coal prices near current levels), targets operating‑margin expansion of 200–300 basis points, plans capital expenditures below $2.4 billion, and expects free cash flow to increase at least 50% versus 2025; management noted 2025 included roughly $150 million of unique charges (about $50 million in Q4 — ~$31M separation and ~$21M technology impairments) that largely will not recur, ending real headcount finished the quarter down over 3%, and inflation assumptions are ~3–3.5% overall with a ~3.75% union wage increase next year. In Q4 operational/revenue metrics cited: total volume +1% and total revenue −1% (total RPU −2%), intermodal revenue +7% on volume +5%, coal volume +1% (domestic +6%, exports −3%; coal revenue −5%, coal RPU −6%), merchandise volume & revenue −2%, chemicals −6%, forest products −11%, fertilizer +7%, and automotive −5% — with the 200–300 bps margin improvement expected to come from workforce optimization, tighter discretionary spend, productivity gains and cycling of prior one‑time costs while preserving safety and service.CSX Financial Statement Overview
Summary
Financials are solid but mixed: cash generation is a clear strength (free cash flow rebounded in 2025 and matched net income), while profitability trends have softened with declining revenue and meaningful margin compression. Leverage is elevated (debt-to-equity ~1.38), reducing flexibility if conditions remain weak.Income Statement
Profitability remains strong for a railroad, but the trend has softened. Revenue has been essentially flat to down since 2022 and declined ~6% in 2025, while margins compressed meaningfully (gross margin ~33% in 2025 vs ~38–41% historically; net margin ~20.5% vs ~24–30%). The business still generates healthy operating profitability (EBIT margin ~32.6% in 2025), but the recent trajectory points to weaker pricing/volume and/or cost pressure versus prior years.72
Positive
Balance Sheet
Leverage is elevated and has generally increased versus earlier years. Debt-to-equity sits around ~1.38 in 2025 (peaking above ~1.5 in 2023–2024), which is workable for the industry but reduces flexibility in a downturn. Offsetting this, equity is sizeable (~$13.2B in 2025) and returns on equity remain solid (~22% in 2025), though down from the high-20s/low-30s levels seen in 2022–2024.64
Positive
Cash Flow
Cash generation is a key strength. Operating cash flow improved to ~$4.6B in 2025 and free cash flow rebounded sharply (up ~22% in 2025 after declines in 2023–2024). In 2025, free cash flow matched net income (free cash flow to net income of 1.0), signaling strong cash conversion. The main watch item is volatility: free cash flow fell in 2023–2024 before the 2025 recovery.78
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 14.09B | 14.54B | 14.66B | 14.85B | 12.52B |
| Gross Profit | 4.68B | 5.51B | 5.60B | 5.72B | 5.29B |
| EBITDA | 5.87B | 7.07B | 7.27B | 7.59B | 7.09B |
| Net Income | 2.89B | 3.47B | 3.67B | 4.11B | 3.78B |
Balance Sheet | |||||
| Total Assets | 43.68B | 42.76B | 42.21B | 41.91B | 40.53B |
| Cash, Cash Equivalents and Short-Term Investments | 675.00M | 1.00B | 1.44B | 2.09B | 2.32B |
| Total Debt | 18.87B | 18.99B | 19.02B | 18.54B | 16.84B |
| Total Liabilities | 30.52B | 30.26B | 30.23B | 29.29B | 27.03B |
| Stockholders Equity | 13.16B | 12.50B | 11.98B | 12.63B | 13.50B |
Cash Flow | |||||
| Free Cash Flow | 1.71B | 2.72B | 3.26B | 3.49B | 3.31B |
| Operating Cash Flow | 4.61B | 5.25B | 5.51B | 5.62B | 5.10B |
| Investing Cash Flow | -2.85B | -2.60B | -2.23B | -2.13B | -1.88B |
| Financing Cash Flow | -2.02B | -3.06B | -3.87B | -3.77B | -4.11B |
CSX Technical Analysis
Positive
42.31
Price Trends
37.65
Positive
36.51
Positive
34.67
Positive
Market Momentum
1.34
Negative
78.79
Negative
91.22
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CSX, the sentiment is Positive. The current price of 42.31 is above the 20-day moving average (MA) of 39.68, above the 50-day MA of 37.65, and above the 200-day MA of 34.67, indicating a bullish trend. The MACD of 1.34 indicates Negative momentum. The RSI at 78.79 is Negative, neither overbought nor oversold. The STOCH value of 91.22 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CSX.
CSX Risk Analysis
CSX disclosed 19 risk factors in its most recent earnings report. CSX reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
CSX Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $157.25B | 22.12 | 40.38% | 2.32% | 1.06% | 8.21% | |
72 Outperform | C$90.33B | 19.52 | 22.24% | 2.62% | 0.23% | -13.22% | |
71 Outperform | $40.53B | 40.04 | 23.93% | 0.71% | -5.90% | -13.16% | |
70 Outperform | C$103.35B | 25.44 | 8.88% | 0.82% | 4.02% | 21.39% | |
68 Neutral | $71.14B | 24.85 | 19.23% | 1.85% | 0.48% | 22.88% | |
67 Neutral | $76.91B | 26.81 | 22.52% | 1.42% | -3.80% | -17.32% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
CSX
CSX
42.31
11.00
35.14%
TSE:CNR
Canadian National Railway
151.19
10.64
7.57%
TSE:CP
Canadian Pacific Kansas City
116.44
8.27
7.65%
NSC
Norfolk Southern
316.23
77.01
32.19%
ODFL
Old Dominion Freight
201.39
20.72
11.47%
UNP
Union Pacific
266.10
29.42
12.43%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.