CSX - Embedded Expectations Analysis - 2021 01 07
CSX Corporation (CSX:USA) currently trades above corporate averages relative to UAFRS-based (Uniform) earnings, with a 25.4x Uniform P/E. At these levels, the market is pricing in bullish expectations for the firm, but management may have concerns about customer volumes, their ability to secure more deals and investments, and their current pricing levelsSpecifically, management may lack confidence in their ability to sustain recent volume increases, convince retail shippers to utilize their services, and sustain train tonnage. They may also have concerns about the sustainability of railway transportation demand and current pricing levels. Moreover, they may lack confidence in their ability to grow their revenue base and reduce emissions. Management may also have concerns about their ability to secure more significant deals and investments, reduce labor costs in their intermodal terminal workforce, and prioritize high-return projects
CSX provides rail-based freight transportation services. The company's principal operating subsidiary, CSX Transportation, Inc., provides a link to the transportation supply chain through its rail network, which serves centers in states east of the Mississippi River, the District of Columbia and the Canadian provinces of Ontario and Quebec. The company's CSX Intermodal Terminals, Inc. subsidiary owns and operates a system of intermodal terminals, primarily in the eastern United States and also performs drayage services (the pickup and delivery of intermodal shipments). The company's Total Distribution Services, Inc. subsidiary serves the automotive industry with distribution centers and storage locations.
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