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1. Company Snapshot

1.a. Company Description

CSX Corporation, together with its subsidiaries, provides rail-based freight transportation services.The company offers rail services; and transportation of intermodal containers and trailers, as well as other transportation services, such as rail-to-truck transfers and bulk commodity operations.It transports chemicals, agricultural and food products, automotive, minerals, forest products, fertilizers, and metals and equipment; and coal, coke, and iron ore to electricity-generating power plants, steel manufacturers, and industrial plants, as well as exports coal to deep-water port facilities.


The company also offers intermodal transportation services through a network of approximately 30 terminals transporting manufactured consumer goods in containers; and drayage services, including the pickup and delivery of intermodal shipments.It serves the automotive industry with distribution centers and storage locations, as well as connects non-rail served customers through transferring products, such as plastics and ethanol from rail to trucks.The company operates approximately 19,500 route mile rail network, which serves various population centers in 23 states east of the Mississippi River, the District of Columbia, and the Canadian provinces of Ontario and Quebec, as well as owns and leases approximately 3,500 locomotives.


It also serves production and distribution facilities through track connections.CSX Corporation was incorporated in 1978 and is headquartered in Jacksonville, Florida.

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1.b. Last Insights on CSX

CSX Corporation's recent performance is driven by several positive factors. The company's operational recovery is complete, with clear signs of volume momentum and improved customer satisfaction. The Howard Street Tunnel expansion and industrial development are on track, unlocking capacity and supporting long-term market share gains. Additionally, CSX's infrastructure projects, stable cash flow, and effective cost controls position it for margin recovery and double-digit profit growth. A leadership transition with Steve Angel as new CEO and a strong shareholder yield, blending income, buybacks, and debt reduction, also contribute to the positive outlook.

1.c. Company Highlights

2. CSX Corporation's 2025 Earnings Report: A Mixed Bag

CSX Corporation's fourth-quarter 2025 results were marked by a 1% volume increase, but revenue fell 1% due to business mix headwinds in coal pricing, resulting in revenue of $3.27 billion. Operating income and earnings per share decreased, largely due to $50 million in expenses related to workforce adjustments and technology portfolio optimization. The actual EPS came out at $0.39, slightly below estimates of $0.411. The operating ratio was 65.4%, an increase from 64.6% in the same period last year.

Publication Date: Jan -23

📋 Highlights
  • Revenue Decline Despite Volume Growth:: 1% volume increase offset by 1% revenue drop due to coal pricing mix headwinds, with $50M in workforce/tech-related expenses reducing operating income and EPS.
  • 2026 Margin Expansion Target:: 200-300 bps operating margin improvement expected via workforce optimization, expense management, and efficiency drives, alongside low single-digit revenue growth.
  • Free Cash Flow Surge:: At least 50% free cash flow growth in 2026 from higher earnings, normalized tax rates, and lower capital outlays (under $2.4B on safety/reliability projects).
  • Inflation & Cost Control:: 3-3.5% inflation (3.75% labor) anticipated, with $150M in recurring productivity gains from labor/PS&O lines and $150M non-recurring savings in 2025.
  • Strategic Growth Levers:: Double-stack rail service expansion via Howard Street Tunnel to boost intermodal/minerals growth, alongside $150M+ annual savings from efficiency initiatives (fuel, car hire, network fluidity).

Guidance for 2026

In 2026, CSX expects low single-digit revenue growth, driven by flat industrial production, modest GDP growth, and stable fuel and benchmark coal prices. The company anticipates 200-300 basis points of operating margin expansion through workforce optimization, discretionary expense management, and efficiency drives. Capital expenditures will be below $2.4 billion, with a focus on safety, reliability, and growth projects. Free cash flow is expected to grow at least 50% compared to 2025, driven by higher earnings, a normalized cash tax rate, and lower capital outlays.

Valuation and Growth Prospects

With a P/E Ratio of 23.15 and an EV/EBITDA of 13.6, the market seems to be pricing in moderate growth expectations. The company's ROE of 23.14% and ROIC of 8.61% indicate a strong ability to generate returns on equity and invested capital. Analysts estimate revenue growth at 4.6% for next year, which is slightly higher than the company's guidance of low single-digit growth. The dividend yield of 1.45% and Free Cash Flow Yield of 5.67% provide a relatively attractive return for income investors.

Operational Highlights

The company is focused on driving productivity and containing costs, with efforts to improve price yield in 2026 compared to 2025. CSX expects to make progress on pricing, with inflation expected to be around 3-3.5% for the year, with some pressure on the non-labor side. The company is looking at modest volume growth for the year, with positives in intermodal, minerals, and domestic utility markets, but headwinds in the industrial economy.

Long-term Prospects

The company is excited about growth initiatives, including the double-stack opportunity, specifically the Howard Street Tunnel, which will enable efficient double-stack service from the West Coast to Baltimore. They expect to see growth this year and in the future, both domestically and internationally. With a diversified portfolio of opportunities to drive cost improvement, CSX is confident in its ability to deliver cost savings and expects incremental revenue to come in at a high incremental margin.

3. NewsRoom

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CSX (NASDAQ:CSX) Reaches New 12-Month High Following Analyst Upgrade

Jan -25

Source: defenseworld.net

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CSX Q4 Earnings Call Highlights

Jan -24

Source: defenseworld.net

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CSX Corporation Q4: Lackluster End To The Year, But 2026 Looks To Be Better

Jan -23

Source: seekingalpha.com

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CSX (CSX) Sees Positive Movement Despite Q4 EPS Miss, Focuses on FY26 Growth

Jan -23

Source: gurufocus.com

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These Analysts Slash Their Forecasts On CSX After Weak Q4 Results

Jan -23

Source: benzinga.com

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CSX Q4 Earnings & Revenues Lag Estimates, Both Down Year Over Year

Jan -23

Source: zacks.com

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Wealth Group, Ltd. Sells 7,500 Shares of CSX Corp (CSX)

Jan -23

Source: gurufocus.com

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Stock Market Today: S&P 500, Dow Jones, Nasdaq 100 Futures Decline After 2 Consecutive Days Of Gains—Intel, CSX In Focus

Jan -23

Source: benzinga.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.50%)

6. Segments

Rail

Expected Growth: 5.0%

The rail segment is expected to grow at a rate higher than the global hypothesis due to its dominant market position and the increasing demand for efficient and environmentally friendly transportation solutions. The growth is driven by the expansion of intermodal and coal traffic.

Trucking

Expected Growth: 4.0%

The trucking segment is expected to grow at a rate slightly lower than the global hypothesis due to the competitive nature of the industry and potential fluctuations in fuel prices and economic conditions. However, the segment's flexibility and ability to adapt to changing market conditions will support its growth.

Elimination of Intersegment

Expected Growth: 4.5%

As this segment is not a revenue-generating segment, its growth is not directly influenced by market conditions. The expected growth rate is assumed to be in line with the global hypothesis, as it is a mechanical elimination entry that follows the overall revenue growth trend of the company.

7. Detailed Products

Coal

CSX Corporation provides coal transportation services to various industries, including electric utilities, steel manufacturers, and industrial customers.

Intermodal

CSX offers intermodal transportation services, which involve the movement of goods in containers that can be easily transferred between ships, trains, and trucks.

Automotive

CSX provides rail transportation services to automotive manufacturers, transporting finished vehicles and auto parts.

Chemicals

CSX transports a wide range of chemicals, including hazardous materials, to various industries, such as manufacturing and energy production.

Agricultural and Food Products

CSX provides rail transportation services for agricultural and food products, including grains, soybeans, and ethanol.

Forest Products

CSX transports forest products, including lumber, paper, and wood pulp, to manufacturers and distributors.

Metals and Minerals

CSX provides rail transportation services for metals and minerals, including iron ore, coal, and steel.

Phosphates and Fertilizers

CSX transports phosphates and fertilizers to agricultural and industrial customers.

8. CSX Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

CSX Corporation operates in the railroad industry, which has a low threat of substitutes due to the high barriers to entry and the lack of alternative modes of transportation for bulk goods.

Bargaining Power Of Customers

CSX Corporation has a diverse customer base, including industrial, agricultural, and energy companies. While customers have some bargaining power, CSX's strong brand and extensive network limit their ability to negotiate prices.

Bargaining Power Of Suppliers

CSX Corporation has a strong bargaining position with its suppliers, including fuel providers and equipment manufacturers. The company's large scale and long-term contracts give it significant negotiating power.

Threat Of New Entrants

The railroad industry has high barriers to entry, including significant capital requirements and regulatory hurdles. This limits the threat of new entrants and allows CSX Corporation to maintain its market position.

Intensity Of Rivalry

The railroad industry is highly competitive, with several major players vying for market share. CSX Corporation faces intense competition from Norfolk Southern, Union Pacific, and other railroads, which can lead to pricing pressure and decreased market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 60.53%
Debt Cost 5.58%
Equity Weight 39.47%
Equity Cost 10.01%
WACC 7.33%
Leverage 153.37%

11. Quality Control: CSX Corporation passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
PACCAR

A-Score: 6.0/10

Value: 4.1

Growth: 6.7

Quality: 5.0

Yield: 8.0

Momentum: 4.0

Volatility: 8.3

1-Year Total Return ->

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Stock-Card
Paychex

A-Score: 6.0/10

Value: 2.1

Growth: 5.8

Quality: 9.0

Yield: 7.0

Momentum: 2.5

Volatility: 9.3

1-Year Total Return ->

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Stock-Card
Norfolk Southern

A-Score: 5.6/10

Value: 2.7

Growth: 4.7

Quality: 5.8

Yield: 4.0

Momentum: 7.0

Volatility: 9.7

1-Year Total Return ->

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Stock-Card
Union Pacific

A-Score: 5.5/10

Value: 2.8

Growth: 4.9

Quality: 6.5

Yield: 4.0

Momentum: 5.0

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
CSX

A-Score: 5.3/10

Value: 2.8

Growth: 5.8

Quality: 6.0

Yield: 3.0

Momentum: 5.0

Volatility: 9.3

1-Year Total Return ->

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Stock-Card
Wabtec

A-Score: 5.1/10

Value: 2.9

Growth: 6.6

Quality: 6.6

Yield: 0.0

Momentum: 6.0

Volatility: 8.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

39.15$

Current Price

39.15$

Potential

-0.00%

Expected Cash-Flows