UPDATE: Goldman Sachs Upgrades CSX To Buy; Raises PT To $93

Goldman Sachs is adding CSX Transportation CSX to its Buy List with 19% upside to the $93 price target, from $79. While metallurgical coal demand and higher fuel prices have driven recent CSX stock outperformance, Goldman believes margin upside should drive the next leg. Goldman's analyses of margins give it increased confidence around its Street-high estimates, including work on structural cost reductions, intermodal segment breakout, expected employee/compensation model, and available network assets. Another catalyst is increased visibility around the long-term coal outlook as recently released EPA recommendations were less stringent than expected. Also a positive outlook for US export metallurgical coal given recently raised tariff pricing and strong worldwide demand and Goldman's expectation for CSX to continue to take intermodal share can also provide a bump. CSX closed Tuesday at $78.09