What’s Next For CSX Stock After A 3% Fall In A Week?

by Trefis Team
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[Updated: Sep 22, 2021] CSX Stock Decline

A few months back we discussed that the stock price of  CSX Corporation (NYSE: CSX) may continue to trend higher after rising 8% in a month following strong Q2 results and economic recovery. However, CSX stock has seen a decline of around 12% since then, and it is down 3% in the last five trading days. The recent decline can be attributed to the rising Covid-19 cases, which may hamper the economic recovery and the overall demand for railroad shipping. Furthermore, there are concerns of rising costs with a constrained labor market. But will CSX stock continue its downward trajectory over the coming weeks, or is a rise in the stock imminent?

According to the Trefis Machine Learning Engine, which identifies trends in the company’s stock price using ten years of historical data, returns for CSX stock average around 2.7% in the next one-month (twenty-one trading days) period after experiencing a -2.6% fall over the previous week (five trading days), implying that the stock will likely rebound in the near term. But how would the returns fare if you are interested in holding CSX stock for a shorter or a longer time period? You can test the answer and many other combinations on the Trefis Machine Learning Engine to test CSX Corporation stock price forecast. You can test the chance of recovery over different time intervals of a quarter, month, or even just 1 day!

And if you are considering CSX stock as an investment over a longer time frame, you can explore our forecast for CSX Corporation valuation.

MACHINE LEARNING ENGINE – try it yourself:

If CSX stock moved by -5% over five trading days, then over the next twenty-one trading days CSX stock moves an average of 3%, with a good 68% probability of a positive return over this period, based on the stock’s historical performance.

Some Fun Scenarios, FAQs & Making Sense of CSX Stock Movements:

Question 1: Is the price forecast for CSX stock higher after a drop?

Answer: Consider two situations,

Case 1: CSX stock drops by -5% or more in a week

Case 2: CSX stock rises by 5% or more in a week

Is the price forecast for CSX stock higher over the subsequent month after Case 1 or Case 2?

CSX stock fares better after Case 1, with an expected return of 2.9% over the next month (21 trading days) under Case 1 (where the stock has just suffered a 5% loss over the previous week), versus, an expected return of 0.7% for Case 2. This implies a price forecast of $31 in Case 1 and a figure of $30 in Case 2 using CSX market price of $29.71 on 9/22/2021.

In comparison, the S&P 500 has an expected return of 3.1% over the next 21 trading days under Case 1, and an expected return of just 0.5% for Case 2 as detailed in our dashboard that details the expected return for the S&P 500 after a rise or drop.

Try the Trefis machine learning engine above to see for yourself how the forecast for CSX stock is likely to changes after any specific gain or loss over a period.

Question 2: Does patience pay?

Answer: If you buy and hold CSX stock, the expectation is over time the near-term fluctuations will cancel out, and the long-term positive trend will favor you – at least if the company is otherwise strong.

Overall, according to data and Trefis machine learning engine’s calculations, patience absolutely pays for most stocks!

For CSX stock, the returns over the next N days after a -5% change over the last five trading days is detailed in the table below, along with the returns for the S&P500:

You can try the engine to see what this table looks like for CSX after a larger loss over the last week, month, or quarter.

Question 3: What about the stock price forecast after a rise if you wait for a while?

Answer: The expected return after a rise is understandably lower than after a drop as detailed in the previous question. Interestingly, though, if a stock has gained over the last few days, you would do better to avoid short-term bets for most stocks – although CSX stock appears to be an exception to this general observation.

It’s pretty powerful to test the trend for yourself for CSX stock by changing the inputs in the charts above.

 

[Updated: Aug 13, 2021] CSX Stock Rise

The stock price of CSX Corporation (NYSE: CSX) has seen a rise of over 8% over the last twenty-one trading days, and it is also up a good 38% over the last one year. The recent rise can be attributed to a wider rally in railroad stocks, following strong Q2 for all major companies, including CSX, Norfolk Southern, and Union Pacific. CSX’s revenue of $3.0 billion was better than our forecast of $2.9 billion. Similarly, its earnings of $0.40 per share was comfortably above our forecast of $0.36. The company also closed its acquisition of Quality Carriers in July of this year, and it is expected to add 6% to the company’s top-line this year, while it won’t impact the EPS, given the costs associated with this transaction. Overall, a rebound in the economic growth and intermodal gains due to continued driver shortage in the trucking industry has led to a bullish sentiment for railroad stocks, including CSX.

But now that CSX stock has moved 8% over the last month, will it continue its upward trajectory, or is a fall imminent? Going by historical performance, there is a higher chance of a rise in CSX stock over the next month. Out of 353 instances in the last ten years that CSX stock saw a twenty-one day rise of 20% or more, 208 of them resulted in CSX stock increasing over the subsequent one-month period (twenty-one trading days). This historical pattern reflects 208 out of 353, or about a 59% chance of a rise in CSX stock over the coming month. See our analysis on CSX Corporation Stock Chances of A Rise for more details.

Calculation of ‘Event Probability‘ and ‘Chance of Rise‘ using last ten years data

  • After moving 6.2% or more over a five-day period, the stock rose in the next five days on 47% of the occasions.
  • After moving 6.4% or more over a ten-day period, the stock rose in the next ten days on 48% of the occasions
  • After moving 7.9% or more over a twenty-one-day period, the stock rose in the next twenty-one days on 59% of the occasions.

Predict average return on CSX Stock Return: AI Predicts CSX Average and Excess Return After a Fall or Rise

CSX (CSX) Stock Return (Recent) Comparison With Peers

  • Five-Day Return: CSX highest at 6.2%; CNI lowest at -2.6%
  • Ten-Day Return: CSX highest at 6.4%; CNI lowest at -1.5%
  • Twenty-One Days Return: CSX highest at 7.9%; CNI lowest at 0.7%

While CSX stock may have more room for upside, 2020 has created many pricing discontinuities which can offer attractive trading opportunities. For example, you’ll be surprised how counter-intuitive the stock valuation is for Canadian Pacific Railway vs. D R Horton.

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