How Is CSX Corporation's Stock Performance Compared to Other Railroads Stocks?

Industrials (names A - I) - CSX Corp_ railcar-by Jonathan Weiss via Shutterstock

Valued at a market cap of $63.8 billion, Florida-based CSX Corporation (CSX) is a leading provider of rail-based freight transportation services. The company operates a vast 19,500 route mile rail network across 26 states and parts of Canada, facilitating the movement of a wide range of commodities and intermodal shipments.

Companies valued at $10 billion or more are generally considered “large-cap” stocks and CSX Corporation fits this criterion perfectly, exceeding the mark. CSX Corporation is a prominent Fortune 500 company known for its critical role in transportation and logistics, offering services that include intermodal containers and trailers, supported by approximately 3,500 locomotives in its fleet.

However, the freight railroad company has declined 18.7% from its 52-week high of $40.12, reached in February. Over the past three months, shares of CSX Corporation have dropped by 12.7%, underperforming the broader Transportation Average iShares ETF (IYT), which experienced a 6.8% decrease during the same period.

Longer term, CSX shares tumbled a 6.1% decline on a YTD basis, trailing behind IYT's 2.7% loss. Furthermore, CSX Corporation's shares have dropped 1.9% over the past 52 weeks, compared to IYT's 5.4% gains over the same time frame.

To validate its bearish trend, CSX has been trading below its 50-day moving average since April and its 200-day moving average since the beginning of this month.

CSX's underperformance can be attributed to declining revenues and operational challenges such as lower intermodal demand. These issues have been exacerbated by a shift in consumer spending towards services following the pandemic, as well as global shipping delays that have put pressure on margins.

Plus, despite CSX's Q1 earnings results exceeding Wall Street's expectations, its shares plunged nearly 2% on Apr.17. This drop was driven by apprehensions surrounding the closure of a vital coal export port in Baltimore following a bridge collapse. This closure is anticipated to lead to monthly revenue losses ranging from $25 million to $30 million, significantly impacting the Q2 earnings outlook.

To underscore the stock's underperformance, CSX’s rival, Norfolk Southern Corporation (NSC) has slightly outpaced CSX's decline over the past 52 weeks, with NSC falling 1.5%.  However, on a YTD basis, NSC's decline of 6.6% lags behind CSX's loss over the same period.

Despite CSX’s underwhelming price action, analysts are optimistic with a consensus rating of "Strong Buy" from 21 analysts. The mean price target of $38.94 suggests a 19.4% upside potential from current levels.

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On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.