Analyst sees freight trends helping boost CSX in 2025

Analyst sees freight trends helping boost CSX in 2025 (Courtesy of the Jacksonville Daily Record) — Ahead of its year-end earnings report Jan. 23, one analyst is forecasting positive trends for CSX Corp.

The railroad company is generally the first Jacksonville-based company to report results every quarter and it’s also one of the first large U.S. industrial companies to report, so its earnings can be a bellwether of trends in the national economy.

The trends may not be reflected in its fourth-quarter report but Jefferies analyst Stephanie Moore is projecting an upward turn in the freight market which will help CSX.

Moore raised her rating on CSX from “hold” to “buy” in a Jan. 10 report on transportation on logistics stocks.

“Closing the door on 2024 and as the current freight recession approaches its third year, we’re increasingly positive on the freight backdrop for 2025,” she said in her report.

“Coming out of this current freight recession, we’re constructive on CSX’s ability to see accelerating financial performance.”

Moore thinks CSX is a good play for investors seeking to profit from freight market growth as a domestic-focused railroad.

“In our view, we think CSX’s largely insulated geographic presence should be considered positive as investors grapple with the puts and takes of potential tariff and trade policy changes between the U.S. and China, Mexico, and Canada,” she said.

“Furthermore, we’re constructive on southeast industrial development and CSX’s advantage in the space. Compared to the previous decade which saw industry leaving the rail network, the company has seen a sea change and expects to see a tailwind with industry coming back to the U.S.”

Moore maintained a “hold” rating on Jacksonville-based trucking company Landstar System Inc. in her report on the transportation industry.

“We believe it is more likely that earnings estimates are coming down, not up, and we see limited catalysts for Landstar shares to outperform in this environment while the spot market remains muted,” she said.

“That said, we expect continued strong cash flow over the next several quarters, leading to continued share repurchases and potentially a special dividend, which the company has a history of paying every few years.”