Shares of the transportation company CSX Corp. (NASDAQ:CSX) increased about 3% in Wednesday’s after-hours trading. The company’s better-than-expected Q1 financials and management’s upbeat 2024 guidance lifted its stock. CSX stock has gained nearly 14% over the past year.
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CSX, which provides rail, intermodal, and rail-to-truck transloading services, has identified nonproductive assets and is likely to capitalize on cost-saving opportunities. Moreover, the company is focusing on increasing operational speed and expanding capacity, which will improve the efficiency of its network. This will enable CSX to gain market share and attract new customers.
With this background, let’s delve into Q1 financials.
Q1 Sales and Earnings Exceed Expectations
CSX delivered revenue of $3.68 billion in Q1, down 1% year-over-year, reflecting a lower fuel surcharge, weaker trucking revenue, and a decline in export coal prices. Nonetheless, revenues came in higher than the Street’s forecast of $3.67 billion, driven by higher intermodal and coal volumes.
CSX’s first-quarter earnings of $0.46 per share fell 4% year-over-year. However, it exceeded analysts’ average estimate of $0.45.
Management Sees Growth Ahead
CSX’s management remains upbeat and expects to benefit from favorable trends across many of the company’s target markets. The company’s focus on improving customer service should drive its volume and top line. CSX projects its total volume and revenue to increase in the low- to mid-single-digit range in 2024.
On the profitability front, the company expects to benefit from volume growth, pricing gains, and efforts to improve efficiency and productivity.
Is CSX a Good Stock to Buy?
Wall Street is cautiously optimistic about CSX stock. It has 11 Buy and four Hold ratings for a Moderate Buy consensus rating. Analysts’ average price target on CSX stock is $38.85, implying 13.73% upside potential from current levels.
