CSX Corp. ($CSX) Stock | Weak Earnings Weighing On Share Price





CSX Corp Earnings

Tuesday after the close, CSX Corp. (CSX) announced fourth-quarter earnings that missed analyst expectations and sent shares into a slight selloff. CSX announced earnings per share of 48 cents on $2.78 billion in revenue, down 13% from same period last year, while analyst were looking for 46 cents per share on $2.82 billion in revenue. CSX blames lower coal volumes for the missed earnings due to most power plants switching over to natural gas. This miss was no surprise to me as this industry hasn’t been the strongest and going forward I don’t see it bouncing back anytime soon. We will need to see some major improvements with a strong catalyst to give us any kind of indication that shares will turn around. Currently analysts have an average price target of $30.15.


CEO Comments

“With negative global and industrial market trends projected for 2016, full-year earnings per share are expected to be down compared to 2015,” said CEO Michael J. Ward, looking ahead to the new fiscal year. (MarketWatch)


CSX Technicals

CSX Chart

You can see in the 5 minute chart above that share of CSX sold off to premarket lows of $22.80 before bouncing back into the low $23s. Shares should be weak today after dismal earnings so we’ll have to wait and see how price action behaves after the open around support and resistant levels. CSX has a float of roughly 971 million shares with an average daily volume over the past month of 8.6 million shares.


Looking back over the daily chart you can see that CSX has been trending down over the past year from highs of $37.67 to lows of $23.18 just reached a few days ago, a 38% decrease. Shares started a strong dip lower at the end of June, passing below the 200-day moving average which eventually resulted in death cross forming on the chart a couple weeks later. There was some consolidation in the $27-30 range before continuing the trend into the low $20s. To find support we had to look all the way back to 2013 where we can see that it should come in around $22.40, $22 and $20. Resistance will be met at $24.60, $25 and the $26 levels. This stock doesn’t really have enough volatility to day trade but if you were looking to take a position I would be on the short side just because of the macro environment they are in and because I don’t see coal making a comeback anytime soon.


Company Profile

CSX Corp. is a transportation supplier company. It provides rail-based transportation services including traditional rail service and the transport of intermodal containers and trailers. The company through its principal operating subsidiary, CSX Transportation, Inc., provides an important link to the transportation supply chain through its rail network. CSX was founded in 1827 and is headquartered in Jacksonville, FL. (MarketWatch)