CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
We raise our 12-month price target by $1 to $33 on a forward P/E of 16x our 2025 EPS estimate, a discount to the five-year average of 18x on lower forecasted margins and expected negative impacts on auto shipments due to the UAW strike. We lower our 2023 EPS view to $1.82 from $1.87 and 2024’s to $1.92 from $2.03. We also remove 2025 estimates. Q3 sales fell 8% Y/Y on lower fuel surcharges, reduced intermodal storage revenue, a decline in export coal benchmark prices, and a decrease in intermodal volumes (particularly international), partially offset by higher merchandise yields and coal volume growth. Volume/revenue by segment: Merchandise flat/-1%; Coal +9%/-5%; and Intermodal -7%/-14%. Operating income declined 18% Y/Y. CSX posted Q3 EPS of $0.42, meeting expectations. We view the UAW strike as a negative for CSX, as auto has been a bright spot amid an overall tough year. We note CSX has spent $2.9B in share repurchases and $665M in dividends YTD as of Q3 2023, which we view very favorably for shareholders.