Conversations surrounding mergers and acquisitions (M&A) in the rail industry have gained momentum, sparked by recent industry discussions and trade articles. Although Wells Fargo indicates that the likelihood of such deals remains relatively low, the potential has noticeably increased from previous levels. The primary hurdle for any transcontinental merger remains the approval from the Trump administration. Nonetheless, the Surface Transportation Board (STB) is perceived as unlikely to obstruct such developments.
Wells Fargo has revised its probability for a successful merger to approximately 20%, noting an accelerated timeline aiming for completion by 2025 to align with the end of Trump's presidential term. If rail M&A proceeds, CSX (CSX, Financial) and Norfolk Southern are considered prime candidates for mergers, with CSX potentially experiencing significant benefits. Additionally, Wells Fargo anticipates that scarcity value and anticipated synergies could enhance the value of all rail stocks in the sector.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 23 analysts, the average target price for CSX Corp (CSX, Financial) is $32.78 with a high estimate of $38.00 and a low estimate of $27.00. The average target implies an upside of 3.28% from the current price of $31.74. More detailed estimate data can be found on the CSX Corp (CSX) Forecast page.
Based on the consensus recommendation from 27 brokerage firms, CSX Corp's (CSX, Financial) average brokerage recommendation is currently 2.2, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for CSX Corp (CSX, Financial) in one year is $35.39, suggesting a upside of 11.5% from the current price of $31.74. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the CSX Corp (CSX) Summary page.
CSX Key Business Developments
Release Date: April 16, 2025
- Total Revenue: $3.4 billion, down 7% from the same period last year.
- Total Volume: Decreased 1% compared to last year.
- Intermodal Volumes: Increased 2% due to an uptick in port traffic.
- Earnings Per Share (EPS): Decreased by 24%.
- Merchandise Revenue and Volume: Both declined 2%.
- Coal Revenue: Declined 27% on 9% lower volume.
- Intermodal Revenue: Down 3% despite a 2% increase in volume.
- Expenses: Increased by 2%, with $45 million additional costs related to network disruptions and severe winter weather.
- Free Cash Flow: Stable in the first quarter.
- Capital Expenditures: $133 million spent on Blue Ridge Subdivision rebuild project.
- Cash Return to Shareholders: Nearly $1 billion in the first quarter.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- CSX Corp (CSX, Financial) reported a 2% increase in intermodal volumes, driven by an uptick in port traffic.
- The company saw a third straight sequential decline in its FRA injury rate, indicating improvements in safety.
- CSX Corp (CSX) achieved a record with four automotive terminals winning industry awards for service excellence.
- The company has a strong pipeline of nearly 600 industrial development projects, with 24 new facilities going live in the first quarter.
- CSX Corp (CSX) maintained strong customer relationships, evidenced by high net promoter scores despite operational challenges.
Negative Points
- Total revenue for the quarter decreased by 7% year-over-year, primarily due to lower benchmark coal prices and reduced fuel surcharge.
- Earnings per share fell by 24%, reflecting reduced revenues and network performance challenges.
- Operational disruptions, including severe weather and infrastructure projects, led to inefficiencies and increased expenses.
- The company faced a 9% decline in coal volume, impacted by lower export prices and temporary mine outages.
- CSX Corp (CSX) experienced challenges in network fluidity, with increased dwell times and yard congestion affecting service metrics.
