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CSX Corp. Message Board

  • retiredcsx retiredcsx Nov 4, 2010 2:01 PM Flag

    $72 current stock price

    29 Oct 2010 Credit Suisse who is one of 5 best analyst on CSX updated following:
    CSX announced in an 8-k this morning a new growth initiative, dubbed "Grow to 65" which is an effort to achieve a full yr operating ration of 65% by NO LATER THAN 2015, brought about due to infracture improvements in network.

    IMPLIED EARNINGS: A 65% operating ratio by 2015 is not a stretch, in our view. We are already modeling for a 69.2% O.R. in 2012, and if we assume 5% annual revenue growth from 2013-2015 and apply a 65% operating ratio, we arrive at 2015 EPS of roughly $7.20/share.
    WHAT DOES IT MEAN FOR THE STOCK? If we apply a 14x P/E multiple to the hypothetical 2015 EPS of $7.20, we arrive at a stock price of about $100 - the present value of which is - $68. This is not far off from our 12-month target price of $80, which points toward A STOCK PRICE TODAY OF ABOUT $72.

    We remain positive on the stock and believe it is "undervalued." Further, we note that our implied earnings analysis assume pricing gains in the 3% range, which is NOT AN AGGRESSIVE ASSUMPTION.

    On my post: 60 soon, and wall of worry gave a full yr of my opinion/outlook. We have made over 25% gain and if the stock was trading at $65 today we still have over 20% gain to bring stock price to $78.

    The stock is still very cheap at $65....with p/e under 17, with accelerated earnings growth and super margin improvements warrants a p/e over 20?

    Also CSX stock buy-back over $100 million per month over the next 6 (six) Months. awesome

    Oil prices going up will also convert more truck to trains, and KILL planes.

    Longs will be make a trade today is still very risky due to value....I'm 100% holding.

    Good luck all....please tell me your opinion

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