CSX (CSX) Valuation in Focus After Strategic Intermodal Rail Partnership with Canadian National

If you’ve had your eye on CSX, the recent announcement might have caught your attention. CSX (CSX) is teaming up with Canadian National to launch a new intermodal rail service connecting Canada’s West Coast gateways to Nashville, running through Memphis. By swapping out the traditional trucking segment for an all-rail solution, both companies aim to make supply chains faster, greener, and more reliable. This move highlights where CSX sees the current growth opportunities.

This partnership fits neatly within CSX’s broader strategy of expanding reach via collaboration, not consolidation. Over the past year, CSX stock has essentially stayed flat, barely up year-to-date, with only a modest gain since June after a slight dip last month. Alongside these moves, the company is wrapping up major infrastructure projects in Baltimore and Tennessee and announcing similar intermodal agreements, all while competitors grab headlines for large mergers.

As momentum stays muted and these network-expansion deals roll out, the question remains whether the market is giving investors a rare entry point or if future growth is already reflected in the price.

Most Popular Narrative: 14% Undervalued

The prevailing narrative views CSX as undervalued relative to its fair value, attributed to anticipated improvements in earnings, profit margins, and major infrastructure investments.

CSX's completion of major infrastructure projects, such as the Howard Street Tunnel and Blue Ridge subdivision rebuild, is expected to improve network fluidity. This could lead to increased operational efficiency and service reliability, supporting revenue and margin growth.

Curious how bold projections and ambitious upgrades could reshape CSX’s financial future? Analysts are not just betting on incremental growth. There is a powerful hidden calculation at work. Wondering what optimistic forecasts are behind the valuation jump? The numbers driving this story may surprise you.

Result: Fair Value of $37.92 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent macroeconomic uncertainty and severe weather disruptions could easily derail CSX’s recovery story, which may keep future growth projections in check.

Find out about the key risks to this CSX narrative.

Another View

Looking from a different angle, our DCF model also suggests CSX trades below its estimated fair value. However, how reliable is any valuation in the face of unpredictable rail demand and industry change?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out CSX for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own CSX Narrative

If you see things differently or want to dive deeper into CSX's story, you can assemble your own view in just a few minutes. Do it your way.

A great starting point for your CSX research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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