(Part-1) CSX (CSX) Should Beat Earnings Estimates: Can Stock Rise?

CSX (CSX) is likely to post lower revenues and year-over-year profitability for the quarter ending December 2023. This consensus view provides a solid understanding of the company's earnings situation, but how the actual outcomes compare to these expectations might affect its stock price.

If these key metrics are better than predicted, the January 24, 2024 earnings announcement may boost the stock. If they miss, the stock may fall. 

 Management's earnings call description of business circumstances will primarily decide the price change's durability and future earnings forecasts, but it's worth handicapping the probabilities of a good EPS surprise.

This freight railroad is predicted to announce quarterly earnings of $0.44 per share, down 10.2% year-over-year. Revenues are forecast to drop 2.2% to $3.65 billion. Over the past 30 days, the consensus quarter EPS estimate has dropped 1.53%. This shows how the covering experts have adjusted their initial estimates over time.

Investors should note that the aggregate change may not represent the direction of estimate changes by each covered analyst. Pre-earnings estimate revisions reveal business circumstances for the time. Our unique surprise prediction algorithm, the Zacks Earnings ESP, relies on this information.

Zacks Earnings ESP compares the Most Accurate Estimate, a more recent EPS estimate, to the Zacks Consensus Estimate for the quarter. Analysts adjusting their forecasts before an earnings announcement have the newest information, which may be more accurate than what they and others in the consensus projected previously. Thus, a high or negative Earnings ESP rating suggests real earnings will deviate from expectations. The model solely predicts positive ESP readings.

An earnings beat is likely with a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold). Stocks with this combination deliver a positive surprise approximately 70% of the time, and a strong Zacks Rank boosts Earnings ESP prediction.

Negative Earnings ESP does not indicate an earnings miss. For firms with negative Earnings ESP and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell), we found it challenging to anticipate an earnings beat.

On CSX, the Most Accurate Estimate is higher than the Zacks Consensus Estimate, indicating that analysts are now optimistic about profits. This yields +0.68% Earnings ESP. However, the stock has a #3 Zacks Rank. CSX will likely outperform the consensus EPS prediction given this combo.

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