CSX Corporation (NASDAQ:CSX) Third-Quarter Results Just Came Out: Here's What Analysts Are Forecasting For Next Year

As you might know, CSX Corporation (NASDAQ:CSX) recently reported its quarterly numbers. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for CSX

After the latest results, the 23 analysts covering CSX are now predicting revenues of US$11.3b in 2021. If met, this would reflect a satisfactory 6.2% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to climb 19% to US$4.28. In the lead-up to this report, the analysts had been modelling revenues of US$11.4b and earnings per share (EPS) of US$4.25 in 2021. 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.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$87.70. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. 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. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that CSX's rate of growth is expected to accelerate meaningfully, with the forecast 6.2% revenue growth noticeably faster than its historical growth of 0.4%p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 8.8% next year. So it's clear that despite the acceleration in growth, CSX is expected to grow meaningfully slower than the industry average.

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. 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$87.70, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. 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.

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