On Friday, RBC Capital Markets adjusted its outlook on CSX Corporation (NASDAQ:CSX), a leading transportation company with a market capitalization of $64.9 billion. Analyst Walter Spracklin reduced the price target on the stock to $33.00 from the previous $34.00 while maintaining a Sector Perform rating. According to InvestingPro data, 17 analysts have recently revised their earnings estimates downward for the upcoming period, suggesting broader caution in the market.
Spracklin's assessment followed CSX's fourth-quarter earnings report, which aligned with expectations but was affected by various operational challenges. Despite maintaining impressive gross profit margins of 49%, the analyst highlighted that CSX management has provided guidance indicating significant cost pressures in the first quarter of 2025. These pressures are anticipated to lead to a year of less than 2% earnings per share (EPS) growth, falling short of the company's previously stated goal for a high single-digit to low double-digit three-year EPS compound annual growth rate (CAGR).
In response to the guidance provided by CSX management, RBC Capital has revised its earnings estimates for 2025-2027 to the lower end of the company's multi-year projections. Spracklin noted that this anticipated lower growth rate, especially when compared to industry peers, is likely to continue affecting investor sentiment towards CSX.
The Sector Perform rating suggests that RBC Capital views CSX's stock as likely to perform in line with the expectations for the overall sector in the near term. Despite the downward adjustment in the price target, the firm's stance on the stock remains unchanged.
In other recent news, CSX Corporation has been the focus of several analyst firms. Baird has revised CSX's stock price target down to $38, while maintaining an Outperform rating. This decision was informed by the company's strong fundamentals and a 20-year track record of consecutive dividend increases, despite anticipated difficulties associated with various projects and fuel and coal issues.
Stifel, on the other hand, has maintained its Buy rating and $37 price target for CSX. The firm anticipates a potential upturn for CSX in 2026, as disruptive factors wane and new infrastructure becomes operational.
BMO Capital Markets has also adjusted its outlook for CSX, reducing the price target to $38 but maintaining an Outperform rating. This adjustment follows CSX's fourth-quarter earnings, which fell short of BMO's expectations. However, the firm sees a solid medium-term growth opportunity for CSX, despite near-term headwinds.
Raymond (NSE:RYMD) James has reduced its price target for CSX to $37 but maintained its Outperform rating. The firm highlighted the potential for CSX's improved service and growth strategy to unlock new avenues for growth.
Lastly, Citi has reduced CSX's stock price target to $39, while sustaining a Buy rating. The firm considers the stock to be attractively priced when looking at normalized earnings projections for future years, despite the near-term headwinds and adjustments to financial forecasts. These are recent developments in the analysis of CSX Corporation.
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