Does CSX Stock Still Offer Growth Potential After Recent Double-Digit Gains in 2025?

Thinking about what to do with CSX stock right now? You are not alone. Maybe you are enticed by the company’s long track record, or perhaps you are raising an eyebrow at recent swings in price. No matter which way you lean, getting a handle on CSX’s value is probably top of mind.

Over the last five years, CSX shares have jumped 41.2%, weathering all sorts of market conditions. That uptick is hard to ignore. Even this year, the stock is up 11.9% year-to-date, and an impressive 10.8% in just the last 30 days. Of course, not every week is up; CSX slipped slightly by 0.2% this past week. Still, the stock’s overall momentum speaks to a business that many investors feel confident holding onto for the long term. When you look at the bigger picture, these moves might reflect shifting expectations around the rail industry and how investors are weighing risk versus opportunity.

But is CSX truly undervalued right now, or are you paying a full price for that resilience? By one popular scorecard, a six-point valuation check, the company only passes on 1 out of 6 measures. That will have some value-focused investors pausing before hitting the “buy” button. In a moment, we will break down what that valuation score means and look at different approaches to figuring out if CSX is truly a bargain, or if you are better off just admiring its railcars from a distance. And if you are after the clearest approach to valuation, keep reading because you will want to see what comes at the end.

CSX scores just 1/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: CSX Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow (DCF) model estimates a company’s value by projecting its future cash flows and then discounting those values back to the present day. This helps investors determine what the business is worth based on its ability to generate cash over time.

According to the latest data, CSX’s current Free Cash Flow is approximately $2.5 Billion. Analysts have provided estimates for the next five years, after which Simply Wall St extrapolates further projections. Free Cash Flow is projected to rise to around $4.9 Billion by 2035. These growth expectations suggest steady performance and ongoing expansion in CSX’s business operations.

After running these projections through the DCF model, the estimated intrinsic value per share for CSX comes to $35.02. Compared to the company’s actual share price, the stock appears to be priced about 2.8% above what the DCF calculation suggests is fair value. This means the stock is trading roughly in line with what the underlying business is expected to deliver, without a notable discount or premium.

Result: ABOUT RIGHT

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for CSX.

Simply Wall St performs a valuation analysis on every stock in the world every day (check out CSX's valuation analysis). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes.

Approach 2: CSX Price vs Earnings

For profitable companies like CSX, the Price-to-Earnings (PE) ratio is a popular valuation gauge. It helps investors assess whether the current share price reflects the company’s future earnings potential. If investors expect higher growth or lower risk from a company, they are often willing to pay a higher PE ratio for its stock. Conversely, if growth is modest or risks are elevated, lower PE ratios are typically seen as fair.

CSX currently trades at a PE ratio of 21.6x. This places it above its peer average of 19.4x, but notably below the Transportation industry average of 26.8x. This difference can present a mixed picture, making it important to go beyond simple industry and peer comparisons.

This is where Simply Wall St’s proprietary “Fair Ratio” comes into play. The Fair Ratio for CSX stands at 17.8x. Unlike basic peer or sector averages, the Fair Ratio takes into account the company’s actual earnings growth trajectory, its profit margins, market capitalization, and specific business risks. As a result, it is a more tailored benchmark for what multiple CSX truly deserves.

Given CSX’s current PE of 21.6x versus its Fair Ratio of 17.8x, shares are trading above what these business fundamentals would suggest is fair value. This points to the stock being somewhat overvalued when looked at through this lens.

Result: OVERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your CSX Narrative

Earlier we mentioned there is an even better way to understand valuation, so let’s introduce you to Narratives. A Narrative is simply your story or perspective behind a company: the set of facts, forecasts, and beliefs that shape why you think a stock is worth what it is. Narratives go beyond the numbers, connecting your outlook on CSX’s business (such as future revenue, earnings, and profit margins) with a corresponding fair value. This approach makes your investment view personal, clear, and actionable.

On Simply Wall St’s Community page, millions of investors use Narratives to build and share their perspectives, making it easy to see what is driving a company’s valuation and how your estimates compare. Narratives are especially helpful because they update automatically when new events or data (including earnings releases or significant news) arrive. This ensures you always have a fresh, relevant viewpoint that is grounded in current reality.

For example, if you are optimistic about CSX’s recovery and ongoing infrastructure upgrades, you might build a Narrative supporting a fair value around $44 per share. If you are more cautious about persistent risks in the industry, your Narrative might suggest a fair value closer to $27. Narratives show that there is rarely just one right answer, helping you make more informed decisions by comparing your view of fair value with the current share price and deciding on your next steps.

Do you think there's more to the story for CSX? Create your own Narrative to let the Community know!

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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