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CSX's Margin Story Likely on Track, UBS Says

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CSX (CSX) delivered a solid upside to Q2 print, with cost side performance supporting earnings, UBS said in a note Thursday.

The report pointed to favorable outlook for volumes despite easing in auto & chemicals as the company expects growth in domestic intermodal, forest products, metals and minerals.

The note also said the new capability and efficiency from Howard Street tunnel/double stack project along with further truckload conversion to intermodal provide potential for sequential growth in intermodal off what was already a strong level in Q2.

CSX indicated it is too early to provide a view on 2027 pricing, but they are seeing acceleration in domestic spot and rail asset contract renewals in intermodal, the note added.

"We continue to believe the combination of improving volume growth, future pricing gains (2027) and execution of their cost programs supports margin improvement, EPS growth and upside for CSX stock," the report said.

UBS kept its buy rating and a $54 price target.

Price: $52.78, Change: $+2.85, Percent Change: +5.71%

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