Analysts’ expectations for the coming year seems positive, with earnings increasing by a robust 31.99%. This growth seems to continue into the following year with rates arriving at double digit 52.77% compared to today’s earnings, and finally hitting $2,903.7M by 2021.
Although it is informative knowing the growth each year relative to today’s level, it may be more valuable to evaluate the rate at which the earnings are moving on average every year. The advantage of this technique is that it removes the impact of near term flucuations and accounts for the overarching direction of CSX’s earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I’ve inserted a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 14.63%. This means, we can anticipate CSX will grow its earnings by 14.63% every year for the next few years.
For CSX, I’ve compiled three fundamental factors you should look at:
1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
2. Valuation: What is CSX worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether CSX is currently mispriced by the market.
3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of CSX? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!