UBS Downgrades Underperforming Railroad Stock

CSX was part of a broader bear note against railroad stocks today

Deputy Editor
Sep 27, 2022 at 10:22 AM
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CSX Corp (NASDAQ:CSX) today received a bear note from UBS, with the analyst downgraded the equity to "neutral" from "buy" and cutting its price-target cut to $31 from $38. The firm cut its rating on Norfolk Southern (NSC) as well, pointing to a deteriorating macro backdrop for the railroad names. UBS expects it to be difficult for U.S. rails to achieve the volume growth currently anticipated by analysts, and expects downward revisions in the short-term. 

CSX is trading flat at last glance, up 0.2% at $27.48, and attempting to inch up from last session's nearly two-year low of $27.23. The stock's 14-day relative strength index (RSI) of 22.3 sits firmly in "oversold" territory, pointing to a potential near-term bounce. Year-to-date, the equity is down 26.8%. 

Of the 28 analysts in coverage, 19 carry a "buy" or better rating on the transportation stock. The 12-month consensus price target of $35.54 is a 29.5% premium to current levels. 

It's also worth noting that the security's Schaeffer's Volatility Scorecard (SVS) sits at a 90 out of 100, meaning CSX has exceeded option traders' volatility expectations during the past year.


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