CSX price target raised to $32 from $30 at RBC Capital

Investing.com - RBC Capital raised its price target on CSX (NASDAQ:CSX) to $32.00 from $30.00 on Friday, while maintaining a Sector Perform rating on the railroad operator’s stock. According to InvestingPro data, CSX currently trades at a P/E ratio of 19.2x and has analyst targets ranging from $27 to $41.

The research firm lowered its second-quarter earnings estimate to $0.42 per share from $0.44 previously, aligning with the current consensus estimate of $0.42. RBC cited expectations for volume and yield to come in below its prior projections.

RBC Capital maintained its 2025 carload growth estimate at 0.5%, which aligns with CSX’s guidance that it "still expect[s] growth." The firm’s 2026 earnings estimate was reduced to $1.98 per share from $2.03, though this remains above the consensus estimate of $1.92.

The higher price target reflects an increased target multiple of 16x, up from 15x previously, which RBC attributed to "a meaningful improvement in velocity and dwell as the quarter progressed."

RBC expects the focus on CSX’s upcoming earnings call to center on "visibility to margin improvement during the remainder of the year" as investors look for signs of operational efficiency gains.

In other recent news, CSX Corporation has announced the ratification of a new five-year collective bargaining agreement with the Brotherhood of Locomotive Engineers and Trainmen, covering approximately 3,400 locomotive engineers. This agreement includes wage increases and health and welfare improvements, marking a significant milestone for the company as nearly 75% of its unionized workforce is now under new agreements. In another development, CSX has faced a setback as the U.S. Supreme Court declined to hear its appeal in an antitrust case against Norfolk Southern (NYSE:NSC), where CSX accused its competitor of restricting access to a vital terminal.

Goldman Sachs recently downgraded CSX’s stock from Buy to Neutral, maintaining a price target of $35, citing potential economic challenges and industry-specific headwinds. Similarly, Bernstein SocGen Group adjusted its price target for CSX shares to $31 from $32, following a 7% earnings miss attributed to network challenges and adverse weather conditions. Despite these challenges, CSX has secured new labor agreements with the Brotherhood of Railroad Signalmen and the International Brotherhood of Boilermakers, Iron Ship Builders, Forgers & Helpers, further solidifying its workforce agreements.

These agreements are part of CSX’s ongoing efforts to enhance workforce conditions and operational efficiency. The company continues to engage in negotiations with remaining unions to reach comparable agreements. Meanwhile, analysts from both Goldman Sachs and Bernstein have expressed caution regarding CSX’s near-term performance due to various operational and market challenges.

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