Wells Fargo Upgrades CSX to Outperform (CSX)

Wells Fargo is upgrading CSX CSX from Market Perform to Outperform. In a note to clients, Wells Fargo writes, "We are upgrading the shares of CSX to Outperform from Market Perform as we think the shares are attractively valued based on our higher estimates. Further, at CSX, we find high earnings visibility through pricing discipline, continued volume recovery and productivity inspired margin gains. Based on the shares' favorable reaction to the earnings report/outlook, we do not think we are alone in this view." Wells Fargo goes on to say, "Nonetheless, we feel our new higher estimates have been conservative and we see potential upside from a variety of factors, including expected 2012 volume and pricing. We raise our 2011 EPS estimate to $5.06 from $4.79 and our 2012 EPS estimate to $5.85 from $5.50. Based on the higher estimates, our 6-12 month Valuation Range moves to $80-82 (8.0x EV/EBITDA on 2011E and 14.0x P/E on 2012E EPS) from $75-77." Shares of CSX are trading today at $70.54, up 0.41% from Tuesday's close.