The quarterly results for CSX Corporation (NASDAQ:CSX) were released last week, making it a good time to revisit its performance. The result was positive overall - although revenues of US$2.6b were in line with what the analysts predicted, CSX surprised by delivering a statutory profit of US$0.96 per share, modestly greater than expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on CSX after the latest results.
Following the latest results, CSX's 23 analysts are now forecasting revenues of US$11.3b in 2021. This would be a reasonable 6.2% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to ascend 19% to US$4.28. Before this earnings report, the analysts had been forecasting revenues of US$11.4b and earnings per share (EPS) of US$4.25 in 2021. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
The analysts reconfirmed their price target of US$87.70, showing that the business is executing well and in line with expectations. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic CSX analyst has a price target of US$100.00 per share, while the most pessimistic values it at US$52.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the CSX's past performance and to peers in the same industry. The analysts are definitely expecting CSX's growth to accelerate, with the forecast 6.2% growth ranking favourably alongside historical growth of 0.4% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 8.8% per year. It seems obvious that, while the future growth outlook is brighter than the recent past, CSX is expected to grow slower than the wider industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. The consensus price target held steady at US$87.70, 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 estimates - from multiple CSX analysts - going out to 2024, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 2 warning signs for CSX you should be aware of.
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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