CSX Announces 3-for-1 Stock Split; Street Says Buy

CSX Corporation (CSX) announced that the board has approved a 3-for-1 stock split in the form of a stock dividend. The company provides rail-based freight transportation services.

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Per the announcement, each shareholder of CSX as of June 18, will receive a stock dividend of 2 additional common shares for every share held. Trading on a split-adjusted basis will begin on June 28.

The move will make the company’s shares accessible to a larger number of employees and investors.

Notably, the stock split will not have any impact on the quarterly cash dividend of $0.28 per share payable on June 15. Based on the current dividend rate, the post-split quarterly dividend will come to $0.093 per share. (See CSX stock analysis on TipRanks)

In its most recent Q1 earnings report, the company reported adjusted earnings of $0.93 per share, which missed analysts’ expectations of $0.95 per share. However, revenue of $2.81 billion surpassed the consensus estimate of $2.78 billion.

Following the earnings announcement, Cowen analyst Jason Seidl maintained a Hold rating and a price target of $98 (1.6% downside potential).

Seidl commented, “CSX is a good company with solid fundamentals that is well positioned to benefit from long-term economic growth. However, we would remain on the sidelines due to less-than-compelling valuation. The shares may be attractive to patient, long-term investors.”

Consensus among analysts is a Strong Buy based on 10 Buys versus 3 Holds. The average analyst price target stands at $107.62 and implies upside potential of 8% to current levels. Shares have gained almost 34% over the past year.

CSX Corporation scores an 8 of 10 from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.