CSX stock (NYSE: CSX) has seen an 8% fall in a month, matching a similar decline for the broader S&P500 index. The fall for CSX, in particular, can be attributed to the fears of a railroad strike. Major railroad companies were given a timeline till Friday (Sep 16) to reach an agreement with the unions over working conditions and wages, among other concerns. If the strike went through, it would have cost $2 billion to the U.S. economy per day.  A railroad strike would have also pressured already high inflation.
However, the strike is now reportedly averted, with a tentative agreement being reached between the parties that address the needs of workers.  The agreed upon terms will likely translate into higher costs for the railroad companies and weigh on their operating margin growth, which has been trending higher. For perspective, CSX’s operating margin rose to 38.9% in 2021 from 27.1% in 2017. While the figure was 36.5% for the last twelve months, rising costs have weighed on the metric over the recent quarters, and this key metric remains higher than the levels seen before the pandemic. Our CSX Operating Income Comparison has more details.
How Will The Recent Fall Impact CSX Stock?
Now that CSX stock has seen a fall of 8% in a month, will it continue its downward trajectory, or is a rise imminent? Going by historical performance, there is a good chance of an increase in CSX stock over the next month. A move of -8% or more in a month for CSX has occurred 154 times in the past ten years. Of those instances, 107 resulted in CSX stock rising over the subsequent one-month period (twenty-one trading days). This historical pattern reflects 107 of 154, or a 69% chance of a rise in CSX stock over the next month. See our analysis of CSX Stock Chance of Rise for more details.
Calculation of ‘Event Probability‘ and ‘Chance of Rise‘ using the last ten years’ data
- After moving -2.1% or more over five days, the stock rose on 56% of the occasions in the next five days.
- After moving -1.4% or more over ten days, the stock rose on 56% of the occasions in the next ten days.
- After moving -8.5% or more over a twenty-one-day period, the stock rose on 69% of the occasions in the next twenty-one days.
This pattern suggests a higher chance of a rise in CSX stock over the next five days, ten days, and the next month.
CSX Return (Recent) Comparison With Peers
- Five-Day Return: CP highest at 2.6%; UNP lowest at -4.7%
- Ten-Day Return: CP highest at 2.6%; ODFL lowest at -6.0%
- Twenty-One Day Return: CP highest at -4.3%; ODFL lowest at -16.8%
While CSX stock looks like it can see higher levels, it is helpful to see how CSX’s Peers fare on metrics that matter. You will find other valuable comparisons for companies across industries at Peer Comparisons.
With higher inflation and rising interest rates, among other factors, CSX stock has seen a fall of 17% this year. Can it drop more? See how low CSX stock can go by comparing its decline in previous market crashes. Here is a performance summary of all stocks in previous market crashes.
Furthermore, the Covid-19 crisis has created many pricing discontinuities which can offer attractive trading opportunities. For example, you’ll be surprised by how counter-intuitive the stock valuation is for CSX vs. Amkor.
|S&P 500 Return||0%||-17%||76%|
|Trefis Multi-Strategy Portfolio||0%||-15%||234%|
 Month-to-date and year-to-date as of 9/15/2022
 Cumulative total returns since the end of 2016
- Possible U.S. Railroad Strike Could Fuel More Inflation, Austen Hufford, Andrew Restuccia, and Esther Fung, The Wall Street Journal, Sep 14, 2022 [↩]
- U.S. Railroad Strike Averted as White House, Unions Reach Tentative Deal, Gareth Vipers, The Wall Street Journal, Sep 15, 2022 [↩]