Should You Investigate CSX Corporation (NASDAQ:CSX) At US$30.19?

Today we're going to take a look at the well-established CSX Corporation (NASDAQ:CSX). The company's stock received a lot of attention from a substantial price movement on the NASDAQGS over the last few months, increasing to US$34.34 at one point, and dropping to the lows of US$30.19. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether CSX's current trading price of US$30.19 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at CSX’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for CSX

What's The Opportunity In CSX?

According to my valuation model, CSX seems to be fairly priced at around 9.1% below my intrinsic value, which means if you buy CSX today, you’d be paying a fair price for it. And if you believe that the stock is really worth $33.21, then there’s not much of an upside to gain from mispricing. Although, there may be an opportunity to buy in the future. This is because CSX’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

Can we expect growth from CSX?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Though in the case of CSX, it is expected to deliver a relatively unexciting earnings growth of 3.2%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.

What This Means For You

Are you a shareholder? It seems like the market has already priced in CSX’s future outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping an eye on CSX, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. You'd be interested to know, that we found 1 warning sign for CSX and you'll want to know about this.

If you are no longer interested in CSX, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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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.