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Looking at CSX Corporation's (NASDAQ:CSX) earnings update in December 2018, analysts seem cautiously bearish, with profits predicted to rise by 3.7% next year compared with the higher past 5-year average growth rate of 26%. By 2020, we can expect CSX’s bottom line to reach US$3.4b, a jump from the current trailing-twelve-month of US$3.3b. I will provide a brief commentary around the figures and analyst expectations in the near term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
What can we expect from CSX in the longer term?
The longer term view from the 19 analysts covering CSX is one of positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To reduce the year-on-year volatility of analyst earnings forecast, I've inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
By 2022, CSX's earnings should reach US$3.9b, from current levels of US$3.3b, resulting in an annual growth rate of 4.9%. This leads to an EPS of $5.35 in the final year of projections relative to the current EPS of $3.86. Margins are currently sitting at 27%, which is expected to expand to 29% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For CSX, there are three key factors you should further examine:
- Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
- Valuation: What is CSX worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether CSX is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of CSX? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.