Analyst: CSX ‘cleanest play’ in railroads (Courtesy of the Jacksonville Daily Record) –Susquehanna Financial analyst Bascome Majors thinks CSX Corp. had a pretty good year in 2023, but the Jacksonville-based company was overshadowed by big news from other major railroads.
As he looks to a strong year for rail stocks in 2024, Majors upgraded his rating on CSX from “neutral” to “positive,” the best rating among the five major railroad companies he covers.
“Rails’ pricing power should warrant a premium in 2024, and we’re slowly becoming U.S. rail bulls again,” Majors said in his Jan. 8 report.
“We upgrade CSX to Positive as the cleanest play on U.S. rail recovery, offering fewer lingering risks than Norfolk Southern Corp. and lower expectations than Union Pacific Corp.,” he said.
Norfolk Southern is still dealing with the aftermath of a derailment and chemical spill in Ohio last year and Union Pacific brought in a new CEO in July.
Investor attention was also focused on the merger of Canadian Pacific and Kansas City Southern last year, Majors said.
“We believe CSX’s consistent execution was sometimes overshadowed by those backdrops, with management delivering more resilient bottom-line performance than peers through rails’ broadly challenging period, the operating team delivering leading customer-facing service metrics through change in the COO suite, and rail outsider CEO Joe Hinrichs effectively selling a version of stakeholder capitalism CSX’s customers, employees, regulators, and shareholders can get behind,” he said.
Majors set a $42 price target for CSX, which was trading at $34.62 at the time of his report.
CSX Photo courtesy of Glassdoors