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Key Takeaways
- CSX shares jumped 7% today after third-quarter revenue rose 12% to a record $4.02 billion and EPS of $0.57 beat the $0.53 consensus.
- CSX’s margin recovery looks real, since operating margin rose 420 basis points even after adjusting for last year’s goodwill charge.
- Management now guides for high-single-digit revenue growth, more than 350 basis points of margin expansion and more than 80% free cash flow growth in 2026.
- Service is the main risk to watch, with on-time arrivals falling to 56% from 64% in the quarter.
CSX (CSX) jumped 7% today on a down day for the market, after the railroad posted record third-quarter revenue and raised its 2026 outlook.
CEO Steve Angel said CSX “delivered strong earnings growth in the third quarter as disciplined execution helped us move more freight, for more customers.”
The numbers back him up.
What exactly happened
After Wednesday’s close, CSX reported:
- Revenue up 12% to a record $4.02 billion, ahead of the $3.96 billion consensus
- EPS of $0.57, up 54% and ahead of the $0.53 consensus
- Operating margin up 880 basis points to 39.1%
- Total volume up 5%, with intermodal up 7%
Those jumps flatter the quarter, since last year’s results carried a $164 million goodwill charge. Strip that out, and EPS still rose 30% and the margin 420 basis points. (Higher fuel surcharges drove more than half the revenue gain, too.)
On the call, management raised its 2026 guidance to high-single-digit revenue growth, margin expansion above 350 basis points, and free cash flow growth above 80%.
TIKR tracks 25 analysts on CSX. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on CSX, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See CSX’s Analyst Ratings
The margins are coming back
That margin guidance matters, since CSX’s operating margin fell every year from 2021 to 2025…
Cost cuts are doing much of the work, including about 1,350 fewer employees than a year ago. And even after this year’s guided expansion, the margin would still sit below its 2021 level. That leaves room for Angel’s goal of “best-in-class performance in 2027.”
Free cash flow tells the same story…
Through nine months, CSX has generated $2.65 billion, against $1.07 billion a year ago. (Last year’s figure absorbed a $440 million hurricane rebuild and $429 million of postponed tax payments, so it’s an easy comparison.)
Service is the weak spot
Service slipped in the quarter: dwell rose 12% from a year ago, and on-time arrivals fell to 56% from 64%. Angel said on CSX’s third-quarter call that “we know our network can perform better,” though October velocity is averaging over 19 miles per hour.
Analysts are looking past it: five firms raised their targets this morning, led by UBS at $60.
My take: This quarter makes the 2027 goal look credible. Margins are rising even on an adjusted basis, free cash flow is heading back toward its old highs, and there’s still ground to win back. If service catches up, I see plenty more upside.
Of course, fuel surcharges can fall as fast as they rose, and the fourth-quarter report early next year will show whether October’s service gains held.
So what is CSX stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what CSX could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
