CSX Corporation CSX is currently mired in multiple headwinds, which, we believe, have made it an unimpressive investment option.

Let us delve deeper.

Southward Earnings Estimate Revisions of CSX: The Zacks Consensus Estimate for current-year earnings has been revised downward from $1.93 per share to $1.84 in the past 60 days. For the next year, the consensus mark for earnings has moved 4.7% south in the same time frame. The unfavorable estimate revisions indicate brokers’ lack of confidence in the stock.

CSX’s Zacks Rank: CSX currently carries a Zacks Rank #5 (Strong Sell). 

Underperformance of CSX: The CSX stock has gained 2.5% year to date compared with the S&P 500’s 24.7% growth. Moreover, CSX’s current Momentum Style Score of F shows its short-term unattractiveness.

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Other Headwinds of CSX: CSX’s prospects have been primarily hurt by the high debt load and soft coal market. The weak coal market has resulted in below-par coal revenues. Coal revenues fell 7% year over year to $553 million in the September-end quarter. Coal volumes decreased 2%. Revenues in the fourth quarter are likely to have been down moderately (approximately by $200 million) due to lower fuel prices and softer coal markets. A weak trucking market is another challenge. Supply-chain disturbances and network-related issues too represent major challenges for CSX. 

Elevated capital expenditures also represent a cause of worry. CSX's management expects 2024 capex to be approximately $2.5 billion, which is higher than 2023 actuals. The company’s shares are more volatile than the market.

Stocks to Consider

Investors interested in the Zacks Transportation sector may consider stocks like Matson MATX and Expeditors International of Washington EXPD.

Matson currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. 

Matson is a Honolulu, HI-based provider of ocean transportation and logistics services. The cost-management actions taken by the company to drive its bottom line are impressive. Efforts to reward its shareholders are commendable as well.

In the past 60 days, the Zacks Consensus Estimate for 2024 earnings has moved 15.5% north. The stock has gained 47.2% year to date.

Expeditors currently carries a Zacks Rank #2 (Buy). This Seattle, WA-based freight forwarder’s efforts to reward its shareholders are commendable. EXPD’s liquidity position is encouraging, too.

EXPD has outshined the Zacks Consensus Estimate in only one of the past four quarters (missing the mark twice and reporting in-line earnings on the other occasion). In the past 60 days, the Zacks Consensus Estimate for 2024 earnings has moved 0.6% north.

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