Analysts Slam CSX With Bear Notes After Earnings

At least eight analysts issued price-target cuts

Deputy Editor
Jul 17, 2019 at 10:03 AM
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Transportation concern CSX Corporation (NASDAQ:CSX) is on course for its worst day in nearly two years, down 8.7% at $72.60 after the company unveiled second-quarter earnings and revenue that fell lower than analyst estimates. The company cited trade headwinds that weighed on its intermodal business, and it had to cut its full-year forecast, too, with CEO James Foote mentioning "unusual" economic conditions in the conference call.

Analysts have been quick to chime in, with no less than eight price-target cuts issued since last night's report, including J.P. Morgan Securites, Credit Suisse, Stifel and RBC. The two latter cut their target price all the way to a Street low of $75 -- a discount to last night's close. Stephens also got in on the action, downgrading the stock to "equal-weight" from "overweight." There's room for even more bear notes from the brokerage bunch, though. Prior to today, eight of the 17 in coverage called CSX a "buy" or better. 

Looking at CSX's recent behavior on the charts, analysts' bullish sentiment isn't that surprising. Just yesterday, the security hit an intraday high of $80.23 -- just within striking distance of its early May record. Plus, at last night's close, the stock was up 28% year-to-date. Now, however, the equity is back below former support at its 80-day moving average, trading near its late-May dip. 

Short sellers might be kicking rocks today, seeing as short interest dropped 14.1% to 11.22 million shares in the last reporting period. This means there's plenty of room to jump back on the bearish band wagon, though. Now, short interest only represents 1.4% of CSX's available float, or 2.9 days at the security's average pace of trading. 

 

 

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