CSX's stock falls after analyst's downgrade, citing valuation and 'less exciting' 2019

Shares of CSX Corp. fell 1.8% in premarket trade, after the railroad company was downgraded by analyst Michael Baudendistel at Stifel Nicolaus, citing concerns over valuation and a "less exciting" 2019. Baudendistel cut his rating to hold, after being at buy for the past year. After "most everything went right" for CSX the past couple of years, Baudendistel said he "no longer sees a solid reason why shares should outperform that market" in the next 12 months. The stock had soared 29.1% over the past 12 months, the best performer within the Dow Jones Transportation Average over the same time, while the Dow transports slipped 1.2% and the Dow Jones Industrial Average gained 3.7%. "Among our railroad models, we believe CSX has the lowest revenue growth potential in the next two years," Baudendistel wrote in a note to clients. He also expects the pace of margin improvement to decelerate "significantly," and it doesn't appear that CSX is entering a new phase of revenue growth.

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