Here’s Why You Should Keep CSX Corp (CSX) In Your Wallet – September 30, 2021
CSX Company (CSX – Free Report) grew 18.5% in the last year, compared to 11.2% growth for the industry to which it belongs.
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For 2021, profits are expected to grow at a rate of 23% year over year.
Main growth drivers
CSX’s cash and cash equivalents were $ 2,990 million at the end of the second quarter of 2021, well above the current debt of $ 122 million. This indicates that the company has sufficient liquidity to meet its current debts. In addition, the increase in the company’s current ratio is encouraging. At the end of the second quarter of 2021, CSX’s current ratio was 2.34, higher than 2.2 at the end of the fourth quarter of 2020. The higher the current ratio, the more able the company is to repay its obligations. current.
With the improvement of the freight environment, CSX volumes have recovered significantly. In the first half of 2021, total volumes increased by 13% with higher volumes in all segments. As the economy continues to recover, CSX expects volumes to continue to improve. The company hopes to achieve double-digit revenue growth (excluding profits from the Quality Carriers transaction) in 2021.
Main concern
Despite an increase in volumes from 2020 levels, revenue for the September quarter is likely to be affected by the Delta strain and hurricane Ida-related woes. With freight shipping dented by these headwinds, overall volumes are likely to decline sequentially.
Zacks rank and actions to consider
CSX currently carries a Zacks Rank # 3 (Hold).
Some top-ranked stocks in the Zacks Transportation sector are Schneider National, Inc. (SNDR – Free Report), CH Robinson Worldwide, Inc. (CHRW – Free report) and TFI International Inc. (TFII – Free report) . All stocks carry a Zacks Rank # 2. You can see The full list of today’s Zacks # 1 (strong buy) ranking stocks here.
The expected long-term growth rate of earnings per share (three to five years) for Schneider National, CH Robinson and TFI International is set at 17.9%, 9% and 31.6%, respectively.