Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of B . The company's strengths can be seen in multiple areas, such as its attractive valuation levels, good cash flow from operations, growth in earnings per share, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
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Highlights from the ratings report include:
- Net operating cash flow has slightly increased to $1,013.00 million or 1.50% when compared to the same quarter last year. In addition, CSX CORP has also modestly surpassed the industry average cash flow growth rate of -5.50%.
- CSX CORP's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, CSX CORP increased its bottom line by earning $1.67 versus $1.36 in the prior year. This year, the market expects an improvement in earnings ($1.76 versus $1.67).
- 38.80% is the gross profit margin for CSX CORP which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 15.70% trails the industry average.
- CSX, with its decline in revenue, slightly underperformed the industry average of 5.1%. Since the same quarter one year prior, revenues slightly dropped by 2.3%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
CSX Corporation, together with its subsidiaries, provides rail-based transportation services. It offers traditional rail service and the transport of intermodal containers and trailers. CSX has a market cap of $20.64 billion and is part of the services sector and transportation industry. The company has a P/E ratio of 11.2, below the S&P 500 P/E ratio of 17.7. Shares are down 5% year to date as of the close of trading on Wednesday.
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--Written by a member of TheStreet Ratings Staff.
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