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Here's Why Investors Should Add CSX Stock to Portfolio Now
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CSX Corporation (CSX - Free Report) is benefiting from higher export coal volumes, increased fuel surcharge, domestic intermodal shipments and volume growth in other segments as well as pricing gains.
Let’s delve deep to unearth the factors working in favor of CSX.
An Outperformer: A glimpse at the company’s price trend reveals that its shares have gained 15.8% in the past year compared with 5.9% growth of the industry it belongs to.
Image Source: Zacks Investment Research
Solid Rank & VGM Score: CSX currently carries a Zacks Rank #2 (Buy) and has a VGM Score of B. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best investment opportunities. Thus, the company seems to be an appropriate investment proposition at the moment.
Northward Earnings Estimates: The Zacks Consensus Estimate for current-quarter and current-year earnings have been revised 6.4% and 4.3% upward over the past 90 days, respectively. Such favorable estimate revisions reflect brokers’ confidence in the stock.
Given the wealth of information at the brokers’ disposal, it is in the best interest of investors to be guided by their expert advice and the direction of their estimate revisions. This is because it serves as a key indicator in determining the price of a stock.
Positive Earnings Surprise History: CSX has an impressive earnings surprise history. The company outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering an earnings surprise of 7.8%, on average.
Strong Growth Prospects: The Zacks Consensus Estimate for 2023 earnings is pegged at $1.95 per share, which indicates year-over-year growth of 2.1%. Moreover, earnings are expected to register 6.4% rise in 2024. The company’s long-term expected earnings per share growth rate is at 7.3%.
Driving Factors: CSX’s top line is gaining from higher export coal volumes, higher fuel surcharge, domestic intermodal shipments and pricing gains. Evidently, coal revenues increased 36% in 2022 driven by strength in export coal. High export coal prices and fuel surcharge revenues are likely to bolster the top line in the near term. Merchandise volumes also grew 4% to $647 million.
CSX projects capex for 2023 to be around $2.3 billion. To combat inflationary pressures, management aims to focus on increasing efficiencies.
CSX’s cash and cash equivalents were $1,469 million at the end of first-quarter 2023, much higher than the current debt of $11 million, implying that the company has sufficient cash to meet its current debt obligations.
Other Stocks to Consider
Some other better-ranked stocks for investors interested in the Zacks Transportation sector are Copa Holdings, S.A. (CPA - Free Report) and Danaos Corporation (DAC - Free Report) .
Copa Holdings, which presently flaunts a Zacks Rank #1 (Strong Buy), is aided by improved air-travel demand. We are encouraged by the company’s initiatives to modernize its fleet. CPA's focus on its cargo segment is also impressive. You can see the complete list of today’s Zacks #1 Rank stocks here.
For second-quarter and full-year 2023, CPA’s earnings are expected to register 912.5% and 84.14% surge, respectively, on a year-over-year basis.
Danaos currently carries a Zacks Rank #2 (Buy).
For second-quarter and full-year 2023, DAC’s earnings have surged 18.9% and 15.2% in the past 90 days, respectively.
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Here's Why Investors Should Add CSX Stock to Portfolio Now
CSX Corporation (CSX - Free Report) is benefiting from higher export coal volumes, increased fuel surcharge, domestic intermodal shipments and volume growth in other segments as well as pricing gains.
Let’s delve deep to unearth the factors working in favor of CSX.
An Outperformer: A glimpse at the company’s price trend reveals that its shares have gained 15.8% in the past year compared with 5.9% growth of the industry it belongs to.
Image Source: Zacks Investment Research
Solid Rank & VGM Score: CSX currently carries a Zacks Rank #2 (Buy) and has a VGM Score of B. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best investment opportunities. Thus, the company seems to be an appropriate investment proposition at the moment.
Northward Earnings Estimates: The Zacks Consensus Estimate for current-quarter and current-year earnings have been revised 6.4% and 4.3% upward over the past 90 days, respectively. Such favorable estimate revisions reflect brokers’ confidence in the stock.
Given the wealth of information at the brokers’ disposal, it is in the best interest of investors to be guided by their expert advice and the direction of their estimate revisions. This is because it serves as a key indicator in determining the price of a stock.
Positive Earnings Surprise History: CSX has an impressive earnings surprise history. The company outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering an earnings surprise of 7.8%, on average.
Strong Growth Prospects: The Zacks Consensus Estimate for 2023 earnings is pegged at $1.95 per share, which indicates year-over-year growth of 2.1%. Moreover, earnings are expected to register 6.4% rise in 2024. The company’s long-term expected earnings per share growth rate is at 7.3%.
Driving Factors: CSX’s top line is gaining from higher export coal volumes, higher fuel surcharge, domestic intermodal shipments and pricing gains. Evidently, coal revenues increased 36% in 2022 driven by strength in export coal. High export coal prices and fuel surcharge revenues are likely to bolster the top line in the near term. Merchandise volumes also grew 4% to $647 million.
CSX projects capex for 2023 to be around $2.3 billion. To combat inflationary pressures, management aims to focus on increasing efficiencies.
CSX’s cash and cash equivalents were $1,469 million at the end of first-quarter 2023, much higher than the current debt of $11 million, implying that the company has sufficient cash to meet its current debt obligations.
Other Stocks to Consider
Some other better-ranked stocks for investors interested in the Zacks Transportation sector are Copa Holdings, S.A. (CPA - Free Report) and Danaos Corporation (DAC - Free Report) .
Copa Holdings, which presently flaunts a Zacks Rank #1 (Strong Buy), is aided by improved air-travel demand. We are encouraged by the company’s initiatives to modernize its fleet. CPA's focus on its cargo segment is also impressive. You can see the complete list of today’s Zacks #1 Rank stocks here.
For second-quarter and full-year 2023, CPA’s earnings are expected to register 912.5% and 84.14% surge, respectively, on a year-over-year basis.
Danaos currently carries a Zacks Rank #2 (Buy).
For second-quarter and full-year 2023, DAC’s earnings have surged 18.9% and 15.2% in the past 90 days, respectively.