-- CSX (CSX) has more room to grow revenue and margins as rail demand improves and cost controls hold, RBC Capital Markets said Wednesday in a report.
The company's Q1 earnings topped expectations, helped by stronger underlying margins and a land sale, RBC said. Excluding the sale, the operating ratio improved, pointing to cost performance that could carry through the year, the report said.
Management raised its 2026 revenue outlook to the mid-single-digit range, driven largely by higher fuel-surcharge revenue, the report said. Improving volume trends were not included in the higher guidance, leaving room for upside, especially with CSX's 600-project pipeline and more than 20 projects already placed into service in Q1, RBC said.
CSX is now aiming for the high end of its 200- to 300-basis-point margin improvement range, with additional room for operating-ratio gains if recent cost trends continue, the report said. RBC lifted its 2026 EPS estimate to $1.90 from $1.84 and raised its 2027 estimate to $2.11 from $2.06.
RBC increased its price target on CSX stock to $47 from $43 and maintained its outperform rating.
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