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Investing.com - BofA Securities upgraded CSX (NASDAQ:CSX) from Neutral to Buy and raised its price target to $42.00 from $34.00 on Thursday. The railroad operator, currently trading at $33.26 with a market cap of $62.5 billion, has shown resilient performance with a 3.92% return year-to-date.
The upgrade reflects increased potential for merger and acquisition discussions that could drive higher valuations across U.S. railroads, according to the research firm.
BofA Securities also cited CSX’s internal service improvements as a factor warranting a valuation reassessment of the railroad operator.
The new price target represents a multiple of 21.5x the firm’s 2026 earnings per share estimate, up from the previous 20.5x multiple on 2025 estimates. This places CSX at the top of the 18.5x-21.5x five-year standard deviation trading range for Class 1 rail companies. InvestingPro analysis shows the stock trading at a P/E ratio of 19.8x, with 10+ additional valuation metrics and insights available to subscribers.
BofA Securities also reiterated its Buy rating on CSX’s Eastern peer Norfolk Southern (NYSE:NSC) and increased its price objective for that company to $305 from $290, based on a 21.0x multiple of projected 2026 earnings. CSX’s next earnings report is due in 6 days, with analysts currently forecasting EPS of $1.64 for FY2025.
In other recent news, CSX Corporation has announced a quarterly dividend of $0.13 per share, payable on September 15, 2025, to shareholders of record as of August 29, 2025. RBC Capital has adjusted its price target for CSX to $32 from $30, maintaining a Sector Perform rating, while lowering its second-quarter earnings estimate to $0.42 per share. Additionally, Goldman Sachs downgraded CSX’s stock rating from Buy to Neutral, citing potential economic challenges and other industry-specific risks, while keeping a price target of $35. On the labor front, CSX’s locomotive engineers, represented by the Brotherhood of Locomotive Engineers and Trainmen, have ratified a new five-year collective bargaining agreement. This agreement includes wage increases and health and welfare improvements, covering approximately 3,400 engineers. CSX has also secured new labor agreements with the Brotherhood of Railroad Signalmen and the International Brotherhood of Boilermakers, enhancing wages, health care, and paid time off. These developments reflect CSX’s ongoing efforts to maintain operational efficiency and workforce stability.
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