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Opinions David Burrows
CSX CorpCSXWEAK BUYMar 12, 2013
$23.38
Stock price when the opinion was issued
$45.47
As of Jun 18, 2026. Market Open.
Transportation
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This is an east coast railroad, and east coast ports will get more business (west coast ports are dysfunctional). They are minting money with coal shipping; Europe has de-nuclearized, so it needs other sources of energy. A long-term investment. Is down 16% this year, but has a lot of upside.
Transportation
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The rails are an interesting space because they are very much affected by the trade dispute with China. It has suffered a bit but then been brought back into a more reasonable valuation range. Revenues will probably drop one percent this year. He does not think it can keep going up. Let the trade issue resolve itself before stepping in.
Transportation
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They are continuing the plan that Hunter Harrison put in place to improve efficiency, drive down the operating ratio, and sell assets. Velocity is up 20% this year: trains are moving faster, which provides better service and increases capacity. CSX is improving its capital profile, with higher cash flow margins. He expects every dollar of revenue to convert to about 30 cents in the future from a historical level of 8 cents. There have been complaints from the customer (shipper) base as a result of all the cost cutting but if CSX keeps improving its operating metrics, the customers’ concerns will be resolved. (Analysts’ price target is 62.92$)
Geoff ScottOwned
Transportation
Rail sector is one of the strongest groups in the market. Biggest driver for the industry is the increased car loadings for oil, petroleum products and chemicals, which the pipelines can’t handle. Prefers to focus on rails that are more specific to this theme. CSX is more focused on the East Coast. He would prefer the West Coast such as the Union Pacific (UNP-N) that benefits from oil rail car loadings, but also North-South trade between the US and Mexico. Would also consider Canadian National (CNR-T) and Canadian Pacific (CP-T).