UBS Cuts Price Target on CSX Corp. (CSX) as Weak Markets Drive Ongoing Pressure

UBS maintained a Neutral rating on CSX (NASDAQ: CSX), and cut the price target to $25.00 (from $27.00), following the company's reported upside 4Q EPS of $0.48/share versus consensus of $0.46/share. The EPS upside versus was driven by higher other income than modeled. However, weak markets should drive ongoing EPS pressure in 2016. CSX's revenue was broadly in line, though helped by slightly higher than normal other revenue.

Analyst Thomas Wadewitz commented, "On Tuesday night CSX reported upside 4Q EPS of $0.48/share versus our estimate of $0.47 and Consensus of $0.46/share. CSX's EPS was down -7.5% y/y (-17% excluding an abnormal land sale gain). Versus our model, CSX's revenue was broadly in line (-12.9% y/y), though helped by slightly higher than normal other revenue (driven by reserve release owing to favorable weather); and the $0.01/share of upside versus our model was driven by higher other income than we modeled (separate from the land sale gain). Headcount reduction was a notable driver of cost reduction as CSX's average headcount was down -3.6% sequentially vs. our -2.0% estimate. Importantly, CSX highlighted 2016 headwinds from global and industrial markets and indicated that they expect EPS to be down y/y in 2016."

For an analyst ratings summary and ratings history on CSX click here. For more ratings news on CSX click here.

Shares of CSX closed at $23.70 yesterday.

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