Since reaching a year-to-date high in early March, CSX stock is about 12.6%. CSX, Union Pacific and Norfolk Southern are reportedly mulling a plan to offer sick leave and make other scheduling changes for employees. The changes will be weighed against the railroads’ ability to pay dividends and fund buybacks.
Analysts remain bullish on CSX stock, with 17 of 28 having a Buy or Strong Buy rating and 10 more rating it at Hold. At a recent trading price of around $32.00, the upside potential to a median price target of $35.00 is about 9.4%. At a high price target of $39.00, the upside potential rises to 21.9%.
For the fourth quarter of fiscal 2022, analysts have forecast revenue at $3.72 billion, which would be down 4.5% sequentially but 8.5% higher year over year. Adjusted EPS are forecast at $0.47, down 10.4% sequentially and up by 11.9% year over year. For the full fiscal year, analysts forecast EPS of $1.89, up 21% year over year, and revenue of $ 14.84 billion, up 18.5%.
CSX stock trades at 17.0 times expected 2022 EPS, 17.0 times estimated 2023 EPS of $1.89 and 15.9 times estimated 2024 earnings of $2.02 per share. The stock’s 52-week trading range is $25.80 to $38.63. The company pays an annual dividend of $0.40 (yield of 1.25%). Total shareholder return over the past year is negative 4.84%.
IBM
Shares of International Business Machines Corp. (NYSE: IBM) have added about 9.7% over the past 12 months. The stock has risen more than 10% in the past six months but has traded basically flat for the past month.
In 2022, IBM had a better year than any tech company, with a market cap of more than $50 billion. IBM’s spin-off of Kyndrl and focus on hybrid cloud adoption has paid off, as has its consulting business. In November, Big Blue announced a 400+ qubit quantum processor with a goal of achieving 4,000+ qubits by 2025. The company also has downplayed its long-time focus on piling up patents. Is this a turnaround that will last?
Of 17 brokerages covering IBM, 11 have a Hold rating and five rate the stock at Buy or Strong Buy. At a price of around $142.00 a share, the implied upside based on a median price target of $145.00 is about 2.1%. At the high price target of $165.00, the implied upside is 16.2%.
Fourth-quarter revenue is expected to come in at $16.38 billion, up 16.1% sequentially but down 1.9% year over year. Adjusted EPS are forecast at $3.61, up 99.5% sequentially and by 7.8% year over year. The full-year estimates call for EPS of $9.06, up 14.2%, on sales of $60.22 billion, up 5%.
IBM stock trades at 15.7 times expected 2022 EPS, 14.8 times estimated 2023 earnings of $9.56 and 14.0 times estimated 2024 earnings of $10.14 per share. The stock’s 52-week range is $115.55 to $153.21. IBM pays an annual dividend of $6.60 (yield of 4.65%), and total shareholder return for the past 12 months is 15.1%.
Lam Research
Semiconductor equipment maker Lam Research Corp. (NASDAQ: LRCX) posted its 12-month high exactly one year ago. Since then, the stock is down about 19%. The better news is that the shares are up almost 33% over the past three months and more than 19% in the past month.
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