Bank of America Merrill Lynch reiterates a Buy rating on CSX (CSX +3.3%) after taking in the company's Q3 earnings report.
The biggest pullout from the report was that improvements in service and efficiency are set to allow CSX to add up to 30% additional growth at low incremental cost and take margins even higher from record levels.
BAML's price objective of $80 works out to 18X the 2020 earnings estimate. The PT was reduced from $82 due to the pricing pressure on coal exports, but still stands above the sell-side consensus mark of $76.64.
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