THE MOMENTUM AT CSX
THE MOMENTUM AT CSX
Widespread signals that an economic recovery is in place, plus Warren Buffett's purchase of Burlington Northern Santa Fe on Nov. 3, have buoyed other rail stocks. Carl Birkelbach, president of Birkelbach Investment Securities, says CSX (CSX) is the most attractive of the lot as it should gain immensely from the coming recovery. Its stock climbed to a 52-week high of 50.15 a share on Nov. 17, up from 20 on Mar. 9. With the stock now at 48.82, Birkelbach says there's at least a further 30% upside potential in the next 6 to 12 months.
George Pickral of investment firm Stephens rates the stock overweight, with a target of 59. "CSX can continue to grow earnings in any environment because of its pricing power and market-share gains," he says. Prices are still depressed at 50% below historical levels, Pickral says. He sees CSX earning $2.85 a share in 2009 and $3.20 in 2010.
Note: Unless otherwise noted, neither the sources cited in Inside Wall Street nor their firms hold positions in the stocks under discussion. Similarly, they have no investment banking or other financial relationships with them.
