UPDATE: BMO Capital Markets Downgrades CSX Corporation Following Q3/13 EPS Report

In a report published Thursday, BMO Capital Markets analyst Fadi Chamoun downgraded the rating on CSX Corporation CSX from Outperform to Market Perform, and lowered the price target from $29.00 to $28.00. In the report, BMO Capital Markets noted, “CSX reported Q3/13 EPS of $0.46, up 5% y/y. Excluding a number of one-time items, we estimate core EPS to be $0.43 versus the BMO Research estimate of $0.42 and the consensus estimate of $0.43. Revenues were modestly softer than expected due to weaker-than-anticipated revenue/car in the non-coal segments offset by better cost performance. Excluding the impact of a challenging coal market, CSX reported core merchandise and intermodal pricing gains of 3.0% in Q3/13 versus 3.3% in Q3/12. We continue to expect the company to achieve inflation-plus pricing (3–4% y/y) over the long term, albeit this could dip below 3% in the short term given modest rail cost inflation and challenging pricing conditions in the domestic intermodal market.” CSX Corporation closed on Wednesday at $25.89.
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Posted In: Analyst ColorDowngradesAnalyst RatingsBMO Capital MarketsFadi Chamoun
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