Should You Pick CSX Stock After A Mixed Q4?

Core Viewpoint - CSX reported mixed Q4 results with revenues missing consensus estimates while earnings met expectations, indicating challenges in revenue generation despite stable earnings performance [1][3][4] Financial Performance - Q4 revenue was $3.54 billion, down 4% year-over-year, with a 1% increase in volume offset by a 5% decline in average revenue per unit [3] - Adjusted earnings per share were$ 0.42, while GAAP earnings were impacted by a one-time goodwill impairment charge, resulting in a bottom line of $0.38 [1][4] - The operating ratio worsened by 140 basis points to 65.7%, contributing to a 7% decline in earnings per share [4] Market Reaction - Following the Q4 results announcement, CSX stock dropped 4%, underperforming the S&P 500 index, which increased by 28% since the beginning of 2024 [2][5] - Historical stock performance has shown volatility, with returns of 26% in 2021, -17% in 2022, 14% in 2023, and -6% in 2024 [5] Future Outlook - The company is expected to face ongoing challenges in coal freight, which has seen a significant decline in both exports and domestic demand [3][4] - Current stock valuation at around$ 33 reflects an 18x expected earnings of $1.85 per share in 2025, suggesting limited growth potential [7]