|Bid||239.67 x 800|
|Ask||239.97 x 900|
|Day's Range||238.16 - 240.61|
|52 Week Range||167.48 - 247.52|
|Beta (3Y Monthly)||1.14|
|PE Ratio (TTM)||19.21|
|Forward Dividend & Yield||2.55 (1.06%)|
|1y Target Est||255.75|
Norfolk Southern's (NSC) measures to improve efficiency and streamline operations through cost-cutting are driving the company's growth.
Canadian Pacific (CP) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.
Federal agency Transport Canada and Minister of Transport Marc Garneau have made a string of rail-related infrastructure funding announcements in recent weeks. The C$2 billion National Trade Corridors' Fund "is a useful program as traffic, both international and domestic is growing," said Bob Ballentyne, president of the Freight Management Association of Canada.
There's not a lot of mystery at the moment when it comes to railroad operator CSX Corporation (NASDAQ:CSX). CSX news of late has been disappointing, thanks to a soft second-quarter earnings report. That report has pulled the CSX stock price down more than 10% -- and trade worries have kept the pressure on.Source: Shutterstock CSX unquestionably is a solid company -- and, at the moment, the premier railroad operator in North America. That alone creates a strong "buy the dip" argument with the CSX stock price now down 17% from its highs.But there are two key questions here. The first is whether even a 17% pullback is enough given factors outside of CSX's control. The second is whether the "buy the dip" case for CSX stock applies just as well to other, cheaper cyclical plays.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Safe Dividend Stocks for Investors to Buy Right Now From here, the answers to those questions are somewhat of a split decision. I'd wager the CSX stock price will start climbing again. But I'd bet, too, that other stocks -- maybe even some in the railroad industry -- will do better. CSX News Doesn't Change the Long-Term CaseShort-term weakness aside, CSX still has been a star performer. The CSX stock price has almost doubled since the 2016 United States presidential election. Even after the selloff, it has seen the biggest gains of the seven major railroad stocks that comprise the Dow Jones Railroads Index. The 132% increase dwarfs the 104% gains at second-place Norfolk Southern (NYSE:NSC).The company has been excellent at controlling expenses. Its 2018 operating ratio -- operating expenses divided by revenues -- was the lowest in that index, at 60.3%. The two Canadian operators, Canadian National Railway (NYSE:CNI) and Canadian Pacific Railway (NYSE:CP), come in next -- at a full point higher.To top it off, after the disappointing CSX news, the stock now is the cheapest of the group. The forward price-to-earnings ratio sits at 14.5x, slightly lower than NSC. It's possible that multiple will rise -- some analysts may still lower 2020 earnings estimates -- but at the least, CSX is valued in line with the peers it's currently outperforming.Given all these positive factors, the selloff looks like an opportunity. And it's not as if the Q2 earnings report was truly that bad. The company did cut full-year revenue guidance, but it left itself room to outperform if second-half demand strengthens. Operating income still increased 2% year-over-year. This wasn't a disaster, but some investors seemed to treat it as such. The Concerns Going ForwardThe performance of CSX stock so far raises one key and seemingly counterintuitive concern. There simply may not be much room left for improvement.Again, CSX's operating ratio is a full point better than that of every other major railroad play. It's three points better than that of Kansas City Southern (NYSE:KSU), and a full five ahead of Norfolk Southern. Is CSX that much better than the rest of its sector? Or is there more room for rivals to catch up -- and drive earnings growth in the process?That concern becomes more important amid the current cyclical fears. Operating expenses for railroads, like those of any business, can be leveraged by revenue growth. But CSX isn't seeing revenue growth coming in the second half of the year. The obvious worry is that declines may continue if the macroeconomic environment in the U.S. weakens. CSX stock already has a headwind from coal shipments, which may not come back. Its CEO, on the Q2 conference call, called the macro picture "puzzling."If the economy turns, revenue growth may head south for more than just a couple of quarters. And it may be CSX whose growth and share price lags, as rivals find more room to cut costs in the new environment. Is CSX Stock the Best Play?Those concerns are real. But at 14x-15x forward earnings, they look priced in. At this point, the declines do seem like they've gone too far.But, again, the other important question is whether CSX stock is the best play. And that's a tougher case to make. Cyclical stocks across the board generally have struggled since the beginning of last year, even though many have rallied somewhat so far this year. And many are downright cheap.Caterpillar (NYSE:CAT), for instance, trades at 10x forward earnings. Many other stocks in industries like construction, boating and automobiles look even cheaper. The risks in those sectors are higher -- but so are the rewards. If an investor has the stomach to make a contrarian bet against the current macro worries, there are options that go beyond CSX and beyond railroads.So from here, the case for CSX stock looks solid but also a bit narrow. It's for investors who are willing to take on cyclical risk -- but only a little. Long-term, the selloff is an opportunity. But the same factors that drove the selloff could open up intriguing opportunities elsewhere.As of this writing, Vince Martin did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Real Estate Investments to Ride Out the Current Storm * 7 Marijuana Penny Stocks to Consider for Those Who Can Handle Risk * 7 Safe Dividend Stocks for Investors to Buy Right Now The post CSX Stock Is a Good Play -- But Is It the Best One? appeared first on InvestorPlace.
CALGARY, Aug. 7, 2019 /PRNewswire/ - As part of the next stage of its transformational journey, Canadian Pacific Railway Limited (CP) (CP) has announced organizational changes that will drive continued success. Robert Johnson, Executive Vice-President, Operations, is retiring at the end of September. Effective September 1, CP's new Executive Vice-President, Operations, is Mark Redd.
Canadian Pacific (NYSE: CP) reached an all-time record in shipping grain volumes in the 2018-2019 crop year, the company said on August 1. The railway hauled 26.8 million metric tonnes of grain and grain products in the crop year that ran from August 1, 2018 to July 31, 2019. Canadian Pacific also reached an all-time monthly record in April when it moved 2.6 million metric tonnes.
CALGARY , Aug. 1, 2019 /CNW/ - Canadian Pacific (CP) (CP) is proud to announce it moved more Canadian grain and grain products during the 2018-2019 crop year than any year in its history. The crop year, Aug. 1 to July 31 , saw 2.8 percent more Canadian grain and grain products shipped from the prior record in the 2017-2018 season and 3.9 percent more than the three-year average. In April 2019 , achieved an all-time record month for Canadian grain and grain products, moving 2.643 MMT.
Canadian Pacific Railway (NYSE: CP) has joined the Blockchain in Transport Alliance (BiTA). In joining the Alliance, CP is supporting BiTA's mission of producing blockchain standards that allow for interoperability between participants in the global supply chain. Blockchain is an open, extensible platform capable of sharing shipping events, messages and documents across all the actors and systems in the supply chain ecosystem.
CALGARY, July 31, 2019 /PRNewswire/ - Canadian Pacific (CP) (CP) has joined the Blockchain in Transport Alliance (BiTA). In joining the alliance, CP is supporting BiTA's mission of producing blockchain standards that allow for interoperability between participants in the global supply chain. Blockchain is an open, extensible platform capable of sharing shipping events, messages and documents across all the actors and systems in the supply chain ecosystem.
Revenue in the petroleum and chemicals segment, including crude-by-rail shipments, rose about 25% in the second quarter, while revenue in the grain and fertilizers unit rose 8.4%. CN's U.S.-listed shares were up 2.4% at $93.30 after the bell. Pipeline congestion has helped crude by rail shipments recover recently, despite narrower differentials between U.S. and Canadian crude after Alberta government's mandated crude production cuts.
Canadian National Railway Co beat analysts' estimates for quarterly adjusted profit on Tuesday, as the country's largest railroad operator shipped higher volumes of crude, refined petroleum products and grains. Revenue in the petroleum and chemicals segment, including crude-by-rail shipments, rose about 25% in the second quarter, while revenue in the grain and fertilizers unit rose 8.4%. CN's U.S.-listed shares were up 2.4% at $93.30 after the bell.
Year-to-date U.S. rail volumes fell for the week ending July 13, according to data from the Association of American Railroads. U.S. rail traffic totaled 14.45 million carloads and intermodal units year-to-date, a 3.3 percent decrease compared with the same period in 2018. Of this, U.S. carloads totaled 7.03 million carloads, down 3.1 percent, while U.S. intermodal containers and trailers totaled 7.42 million units, down 3.5 percent.
As a bellwether to the broader economy, transportation giant CSX (NASDAQ:CSX) attracts for its historical stability. Though it incurred heavy losses during the 2000 tech bubble and the 2008 financial crisis, the company has found a way to come back twice as hard. Today, CSX stock is still trading relatively near its all-time high.Source: Shutterstock However, because the company is a bellwether, it raises questions when it doesn't perform to expectations. Unfortunately, CSX received a painful reminder regarding this lesson.On late Tuesday afternoon, management disclosed its second quarter 2019 earnings results. Although per-share profit was up 7% against the year-ago quarter, the transportation firm missed Wall Street expectations. That sent the CSX stock price down more than 6% during after-hours trading.InvestorPlace - Stock Market News, Stock Advice & Trading TipsOn paper, it wasn't a terrible hit. Prior to the disclosure, consensus estimates pegged earning per share at $1.10. The actual tally was only two pennies shy of the forecast. By itself, this miss doesn't warrant such extreme volatility toward the CSX stock price.However, the revenue haul was a different story. Analysts expected the organization to bring in $3.16 billion in top-line sales. As InvestorPlace writer Karl Utermohlen noted, that would have represented a 2% lift on a year-over-year basis. Instead, the transportation firm rang up only $3.06 billion, a nearly 1.4% slide. Naturally, several stakeholders panicked out of CSX stock. * 9 Retail Stocks Goldman Sachs Says Are Ready to Rip To be fair, CSX has delivered outstanding revenue performances over the past few quarters. Specifically, between Q2 2018 through Q1 2019, sales growth YoY averaged 8.6%. Therefore, it's possible that investors expected too much out of the organization, and unfairly punished CSX stock. Caution Is Key for CSX Stock2018 was a banner year for both CSX and CSX stock. The company generated nearly $12.3 billion in annual revenue, up 7.4% from 2017 results. Moreover, it was the biggest sales haul since 2014. Thus, CSX had the disadvantage of a tough year-earlier comparison.Another factor (and a bullish one) to consider is the underlying economy. Despite fears about a coming recession, key metrics such as the unemployment rate and consumer confidence indicate that the economy is robust. If accurate, this dynamic has positive implications for the CSX stock price.Let's face it: you probably wouldn't even consider this name if we were in a recession.With all that said, I believe investors should adopt a cautious approach with CSX stock. A major red flag that I see with shares is a clear disconnect with the fundamentals.Between Q4 2006 through Q4 2015, the CSX stock price had an 86% correlation coefficient with the underlying firm's revenue. Stated differently, as revenue increased, so too did shares. And the opposite dynamic was also true. Click to EnlargeBut from Q1 2016 onward, the correlation strength dropped to 80%. That's still a statistically significant rate. However, revenue and the CSX stock price didn't always match up as neatly as they did in the past. Particularly, shares jumped considerably while the company made mostly modest (notwithstanding 2018 results) sales gains.And I think this is why investors jumped ship following the Q2 disclosure. Prior to the earnings report, CSX stock was heading toward overbought territory. However, stakeholders demonstrated that they're willing to drive the price higher, so long as the growth narrative remains intact.The last report demonstrated that this narrative is suspect; hence, the fallout in shares. No Other Confirming Factors Support CSXI don't think I would issue a cautionary note for CSX stock if I had other supporting factors. However, I'm not getting a good read from the fundamentals nor the competitive landscape.For example, rival Canadian Pacific Railway (NYSE:CP) also released its Q2 earnings report. The difference, though, was that Canadian Pacific produced strong results, beating on both per-share profitability and revenue.Regarding fundamental headwinds, our own Thomas Niel mentioned coal demand. Thanks to the Trump administration, coal became a hot-button issue on the political front. However, Niel cited industry data that indicated a downward trend in consumption. In all likelihood, this decline will continue, which doesn't help CSX's cause.Finally, sustained economic strength could help buoy shares. But despite strong economic print, this optimism isn't guaranteed to last forever. We're in a contentious political environment. International flashpoints threaten to undermine our relative peace. And we still have a trade war to figure out.At this point, I think it's fair to say that CSX has more challenges than upside catalysts. As such, I'm going to stay on the sidelines.As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 9 Retail Stocks Goldman Sachs Says Are Ready to Rip * 7 Services Stocks to Buy for the Rest of 2019 * 6 Stocks to Buy and 1 to Sell Based on Insider Trading The post Hit the Brakes on High-Flying CSX Stock appeared first on InvestorPlace.
Union Pacific earnings topped views early Thursday after CSX earnings fell short and and Canadian Pacific Railway earnings beat on Tuesday.