Evercore ISI has reduced its price objective for CSX to $40 from $41 while keeping an Outperform rating on the company's stock. The adjustment follows CSX's fourth-quarter 2025 earnings report, which revealed earnings per share below estimates and volumes and yields underperforming across segments. Despite these challenges, the company forecasts modest revenue growth, significant margin expansion, and ongoing cost reduction efforts bolstered by a strong dividend history.
Key Points
- Evercore ISI lowered CSX’s price target to $40 but kept an Outperform rating, reflecting cautious optimism about the railroad's future.
- CSX’s Q4 2025 earnings missed estimates on EPS and volumes, indicating operational headwinds despite lower taxes providing some relief.
- The company forecasts modest revenue growth and margin expansion supported by cost reductions totaling about $150 million and workforce adjustments.
Evercore ISI recently adjusted its price target for CSX (NASDAQ: CSX) down to $40 from $41, although it retained an Outperform recommendation on the rail operator’s shares. Currently priced at around $35.78, analyst price targets for CSX span a range between $30 and $45, indicating a consensus-driven potential upside near 12%. Data compiled by InvestingPro shows that 19 analysts have lowered their earnings projections ahead of the upcoming reporting period.
This revised outlook emerged in the wake of CSX’s fourth-quarter earnings for 2025, which reported earnings per share (EPS) of $0.39. This figure fell short of Evercore’s forecast of $0.42 and the general Street estimate of $0.41. The quarter was marked by softer-than-expected volumes and yields in nearly all operating segments, though a reduced tax rate somewhat alleviated the shortfall.
Looking ahead to 2026, CSX projects its revenue to grow in the low single digits, accompanied by an anticipated expansion in operating margins of 200 to 300 basis points. The company anticipates benefiting from roughly $150 million in cost savings as significant projects are finalized, and staffing levels have been recalibrated to align with the current economic context. Additionally, CSX’s strong history of shareholder returns is underscored by dividend increases sustained over 21 years, with the current dividend yield standing at approximately 1.45%, a metric highlighted by InvestingPro.
Evercore highlights that while some margin gains will be attributed to stable depreciation and amortization expenses, deeper improvements in the cost structure are expected to drive margins higher than the Street's average projection of 190 basis points. Following the quarter’s results, Evercore adjusted its EPS estimates for CSX downward — to $1.82 from $1.85 for 2026 and to $2.05 from $2.09 for 2027 — underpinning the reduced price target.
CSX currently trades at a price-to-earnings ratio of about 23.38, with InvestingPro's Fair Value assessment categorizing the stock as roughly priced in line with its fundamental valuation. The company’s overall Financial Health rating stands at “FAIR,” supported by notably strong profitability measurements.
In a related earnings release, CSX reported Q4 2025 EPS of $0.42, narrowly surpassing analyst estimates of $0.41, yet the quarter’s revenue totalled $3.51 billion, missing the anticipated $3.55 billion figure by approximately 1.13%. Concurrently, Raymond James increased its price target on CSX shares from $40 to $41 while maintaining an Outperform rating, citing confidence in CSX’s ongoing ONECSX operational initiatives poised to drive further efficiencies.
These developments collectively provide insight into CSX’s mixed financial results, strategic adjustments, and valuation considerations amid ongoing challenges and opportunities in the rail transportation sector.
Risks
- Volumes and yields fell short across most segments, suggesting vulnerability to market and demand fluctuations in the transportation sector.
- Lowered earnings forecasts by multiple analysts point to increased uncertainty in CSX’s near-term profitability and growth trajectories.
- The revenue shortfall relative to analyst expectations and revisions by institutional investors highlight the risk of overestimated operational improvements.