Does Faster Trains and Tighter Costs Change The Bull Case For CSX (CSX)?

• Recently, CSX reported its fastest train velocity since early 2021 and completed major projects such as the Howard Street Tunnel and Blue Ridge subdivision ahead of schedule, enhancing network capacity and resilience.
• At the same time, the company is tightening its cost base and governance, including shutting an 84-year-old corporate aviation department shortly after appointing new CEO Steve Angel, signaling a sharper focus on efficiency and capital discipline.
• Now we’ll examine how CSX’s improved train velocity and ahead-of-schedule infrastructure completions shape the company’s existing investment narrative.

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CSX Investment Narrative Recap

To own CSX, I think you need to believe that its core rail franchise can turn better service quality into durable earnings, even with softer volumes and a fairly full valuation. The latest jump in train velocity and early completion of the Howard Street Tunnel and Blue Ridge projects supports the efficiency and capacity catalyst, but does not fully offset near term risks around weaker sales volumes, margin pressure and dependence on cyclical freight demand.

The shutdown of CSX’s 84 year old corporate aviation department looks incremental in dollar terms, but it fits with a broader cost discipline story that matters when EPS growth has been underwhelming and free cash flow margins have compressed. For investors watching catalysts, the combination of improved operating metrics and tighter spending is most interesting when set against concerns about CSX’s richer sales multiple and slower expected revenue growth than the wider US market.

Yet investors should be aware that reliance on volatile coal and fuel markets still leaves CSX exposed if...

Read the full narrative on CSX (it's free!)

CSX's narrative projects $15.7 billion revenue and $3.9 billion earnings by 2028. This requires 3.6% yearly revenue growth and about an $0.8 billion earnings increase from $3.1 billion.

Uncover how CSX's forecasts yield a $39.29 fair value, a 5% upside to its current price.

Exploring Other Perspectives

Two fair value estimates from the Simply Wall St Community cluster tightly between US$36.08 and US$39.29, showing how even a small sample can differ. Set against this, the key catalyst of completed infrastructure projects improving network fluidity may influence how you weigh CSX’s recent operational gains against ongoing volume and margin pressures.

Explore 2 other fair value estimates on CSX - why the stock might be worth just $36.08!

Build Your Own CSX Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your CSX research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.
• Our free CSX research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate CSX's overall financial health at a glance.

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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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