CSX falls as BofA downgraded on key executive departure
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CSX Corporation (NASDAQ:CSX) dropped 3.7% on Friday after BofA downgraded shares on the departure of a key executive.
The bank lowered its rating of CSX to Neutral from Buy for the first time in seven years after learning that Jamie Boychuk, CSXâs chief operating officer, is no longer with the company.
âThis is a cause for concern, in our view, and we lower our rating on CSX to Neutral from Buy for the first time since Feb 2016,â BofA said. âWe believe a growing difference within the newly restructured management team led to the change.â
Last year, CSW appointed Joe Hinrichs as chief executive officer, the first non-rail background CEO at the company and in the industry.
BofA credited Boychuk with running CSX operations organization and turning CSX into one of the best performing railroads.
âWe believe his departure is concerning for the sustainability of PSR (precision scheduled railroading),â BofA wrote.
Intrigue..
The company noted oychuk will receive his severance, which could indicate the departure was not amicable, BofA said.
âThe loss of $2.2 billion intra-day equity value upon his announced departure at CSX highlights the inherent value creation of a PSR guru to a rail needing operational help,â the firm said.
In June, CSX Corporation missed estimates on both lines of its Q2 earnings report.
Revenue fell 3% year-over-year to $3.70B as lower fuel prices, reduced supplemental revenue, a decline in export coal benchmark prices and a decrease in intermodal volumes more than offset the effects of volume growth in coal and merchandise and solid gains in merchandise pricing.
EPS fell 9% from a year ago to $0.49 to miss the consensus mark by a penny. It was the first EPS miss for CSX (CSX) since Q1 of 2021.
CSX shares are down 3.4% over the past 12 months and up 2.6% so far in 2023.
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CSX Corporation (CSX) Q2 2023 Earnings Call Transcript
CSX Corporation falls 4% after failing to top EPS estimates for first time in two years
 CSX GAAP EPS of $0.49 misses by $0.01, revenue of $3.7B misses by $30M