Sterne Agee Adjusts Estimates On CSX

Sterne Agee is out with a research report on CSX CSX and it has a Neutral rating and a $26 price target on shares. In a note to clients, Sterne Agee writes, "2Q11 EPS beats by a penny, but it should have been more –incremental continue to decelerate. CSX reported 2Q11 EPS of $0.46, which is ahead of Consensus of $0.44 and our $0.43 expectation. Adjusting for a lower than expected tax rate, “apples to apples” EPS was $0.45. Volumes were in-line with our 3% expectation while yields were 300bp better than our 7% estimate (due to higher fuel surcharge). As such, since yields should flow straight to the bottom line, we were disappointed to see only about a 36% incremental margin." Shares of CSX closed at $25.05 yesterday.