TD Securities Downgrades CSX (CSX) to Hold

TD Securities downgraded CSX (NYSE: CSX) from Buy to Hold with a price target of $36 (unchanged).

Analyst Cherilyn Radbourne said, "Our downgrade is not reflective of any change in our view of CSX’s franchise or earnings prospects; rather, it is predicated on: 1) CSX’s share price performance post the emergence of media reports that Canadian Pacific Railway Ltd. (CP-T, CP-N) had approached CSX about a possible combination; 2) CSX’s absolute valuation relative to the sector’s historical valuation range, particularly in the context of a bearish outlook for export coal and some lingering uncertainty with respect to the outlook for domestic coal; and 3) CSX’s valuation relative to eastern peer Norfolk Southern Corp. (NSC-N), which has a similar business mix/network geography and would also be a logical acquisition target in the event of industry consolidation (although we do not view Class I consolidation as a probable scenario)."

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 $36.49 yesterday.

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