It is surprising to see that shares of csx Corporation (Nasdaq:company csx) was not seriously in recent weeks, with an increase in stock market volatility and the escalation of the trade war problems between the US and China. Despite all this, csx only got about 8% from the highs of March.
I thought it would be bigger. So we’re doing better than expected performance?
If you ask Thomas Wadewitz, an analyst at UBS, he still expects some impressive legs. The last day of the analyst of the company “a clear plan, he talked about the opportunities and drivers and improve operations”, in accordance with the Wadewitz.
Currently, he sports a buy rating and target price 72$, implying that about 30% growth potential from current levels. He came out with a target price Mar. 2, the same day that Deutsche Bank analyst Amit Mehrotra slapped a price target of $70 on csx in stock. Recently, Susquehanna analysts assigned a target price of 68 $in April. 2.
Obviously, analysts expect big growth. It is also worth noting that the average price target is almost $10 per share or nearly 18% above current levels.
Evaluating a company csx Corporation
One thing that is nice about csx stock? Of its evaluation. Shares trade at 17.5 times profit forecasts this year, and only 14.8 times estimates 2019. Depending on its growth, though, is 17.5 times earnings can be a profitable or a huge premium. So what is it?
If the forecasts are correct, the expected stock look like a bargain.
Analysts expect profits to rise this year by 34% and 18% in 2019. This is despite estimates calling for revenues of just 1.2% and an increase of 3.6% in 2018 and 2019, respectively. As Wadewitz said expected operational improvements, and it is shown in these estimates.
What happens when a company grows 1.2%, but to explode the earnings more than 30%? Field to go through the roof. Operating cash flow and EBITDA should also increase significantly. Clear csx is getting it’s act together and significantly increase its effectiveness.
It helps that the US economy is humming along just fine. While we may not be experiencing significant growth, is a consistent, stable and free of recession in the foreseeable future. Consumers are confident, as a business, and this is good news for trade. When Commerce is strong, so is rails.
It is worth noting csx in the competition. Its growth in 2018 and 2019, significantly superior to Kansas city southern (Ticker NYSE:KSU), and “Norfolk southern” korp. (Ticker NYSE:NSC). Given that all three agents with the same valuation, the expected stock seems like a no brainer among the group, given its better earnings growth.
However, it is also worth noting that both KSU and NSC, according to forecasts, will grow sales by more than 6% in each of the next two years, compared to the rather dismal growth of revenue V. csx
Trading company csx stock
First, you will see the blue support line. This former level of resistance for about six months and finally he caved in and became support in early December. Still, csx is testing this level of about $54 over the past few weeks. I thought that it may breakdown if the broad market rallies and takes in csx stock.
Click to enlarge
Another negative factor is that the trendline (in black). That could keep the csx, even if it does rebound from the current level of support.
So where should we buy csx stock? I don’t know that it will get there, but 48 $(In purple) has established itself as a great buying opportunity. Shares found support near this level throughout the year, and I think he will again keep a proper train to check it out.
At least it will be a good risk/reward proposition, because if he fails, we get out with very minimal losses. Unfortunately, the expected stocks to fall by about 13% to test these levels, something I’m not sure what will, considering how well he has played for the last few weeks.
For this reason, I allocated $51 in green, as a place, more aggressive traders might consider buying near.
Bret Kenwell Manager and author of the forthcoming “blue chips” and on Twitter @BretKenwell. At the time of this writing, Bret Kenwell not to take a position in any of the above securities.