Yahoo Finance Why CSX Corporation (NASDAQ:CSX) Could Be Worth Watching
Let's talk about the popular CSX Corporation (NASDAQ:CSX). The company's shares saw a double-digit share price rise of over 10% in the past couple of months on the NASDAQGS. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Today I will analyse the most recent data on CSX’s outlook and valuation to see if the opportunity still exists.
Check out our latest analysis for CSX
What Is CSX Worth?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 11.60% above my intrinsic value, which means if you buy CSX today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth $28.69, there’s only an insignificant downside when the price falls to its real value. Although, there may be an opportunity to buy in the future. This is because CSX’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
Can we expect growth from CSX?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. However, with a negative profit growth of -0.7% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for CSX. This certainty tips the risk-return scale towards higher risk.
What This Means For You
Are you a shareholder? CSX seems fairly priced right now, but given the uncertainty from negative returns in the future, this could be the right time to reduce the risk in your portfolio. Is your current exposure to the stock beneficial for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping tabs on CSX for a while, now may not be the most optimal time to buy, given it is trading around its fair value. The stock appears to be trading at fair value, which means there’s less benefit from mispricing. Furthermore, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help crystalize your views on CSX should the price fluctuate below its true value.
If you want to dive deeper into CSX, you'd also look into what risks it is currently facing. While conducting our analysis, we found that CSX has 1 warning sign and it would be unwise to ignore this.
If you are no longer interested in CSX, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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