As you might know, CSX Corporation (NASDAQ:CSX) recently reported its quarterly numbers. It was a credible result overall, with revenues of US$2.3b and statutory earnings per share of US$0.65 both in line with analyst estimates, showing that CSX is executing in line with expectations. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
After the latest results, the consensus from CSX's 24 analysts is for revenues of US$10.5b in 2020, which would reflect a perceptible 4.7% decline in sales compared to the last year of performance. Statutory earnings per share are forecast to shrink 7.3% to US$3.46 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$10.5b and earnings per share (EPS) of US$3.45 in 2020. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
There were no changes to revenue or earnings estimates or the price target of US$77.59, suggesting that the company has met expectations in its recent result. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on CSX, with the most bullish analyst valuing it at US$92.00 and the most bearish at US$52.00 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that sales are expected to slow, with a forecast revenue decline of 4.7%, a significant reduction from annual growth of 0.4% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 8.3% next year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - CSX is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that CSX's revenues are expected to perform worse than the wider industry. The consensus price target held steady at US$77.59, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for CSX going out to 2024, and you can see them free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with CSX , and understanding this should be part of your investment process.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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