Investors rewarded strong execution, improving profits and raised outlook.
- RBC Capital increased CSX’s price target to $54, while JPMorgan lifted its target to $58.
- Union Pacific shares hit a record high of $315.90 after the railroad company posted better-than-expected Q2 results.
- Novocure’s Q2 adjusted EBITDA turned positive at $10.8 million compared with a loss a year earlier.
CSX Corp. (CSX), Union Pacific Corp. (UNP), and Novocure (NVCR) hit fresh 52-week highs on Thursday after all three companies reported second-quarter (Q2) results that beat analyst expectations. The gains reflected strong demand in the rail sector and progress in Novocure’s medical technology business.
CSX and Union Pacific stocks climbed 5% and 4%, respectively, while Novocure stock jumped 28%.
CSX Gains From Strong Rail Demand
CSX stock hit a record high of $53.3 on Thursday on its second-quarter (Q2) earnings momentum, as its $3.94 billion revenue and $0.54 earnings per share surpassed the analysts’ consensus estimates of $3.8 billion and $0.52, respectively, according to Fiscal AI data.
After CSX’s Q2 results, several Wall Street analysts raised their price targets for the stock. RBC Capital’s Walter Spracklin increased his target from $51 to $54 and kept an Outperform rating. JPMorgan’s Brian Ossenbeck also raised his target, moving it from $56 to $58, while maintaining an Overweight rating on the shares.
Spracklin said CSX had another strong quarter, beating expectations and raising its outlook. He added that the latest results continue the company’s positive progress from earlier in the year and increase confidence in its future financial performance.
RBC highlighted broad-based expansion across the business, with one of the strongest contributors coming from truck-to-rail conversions. On Stocktwits, retail sentiment around the stock remained in ‘bullish’ territory.
Union Pacific Delivers Broad-Based Improvement
Union Pacific stock climbed to a record high of $315.90 after the company’s Q2 djusted earnings came in at $3.41 per share, above analysts’ forecast of $3.23, while revenue totaled $6.9 billion, helped by higher shipment volumes
The company’s domestic intermodal business achieved another record quarter, helping drive a 21% increase in revenue from its premium freight segment. Following the earnings, Goldman Sachs raised its price target for Union Pacific to $317 from $297 while keeping a ‘Neutral’ rating.
The firm said investors are likely to stay focused on Union Pacific’s proposed acquisition of Norfolk Southern (NSC) rather than its improving business performance over the next several months. Retail sentiment around the stock improved to ‘extremely bullish’ from ‘bullish’ territory the previous day.
Novocure Reaches Profit Milestone
Novocure stock hit an annual high of $20.55 after after the company showed improvement in its financial performance. Q2 revenue increased 15.6% from the previous year to $183.6 million, while adjusted EBITDA turned into a $10.8 million profit compared with a loss during the same period last year.
The biotechnology company credited expanding adoption of its Tumor Treating Fields products, including Optune Lua and Optune Pax, for supporting growth. Retail sentiment around the stock improved to ‘extremely bullish’ from ‘bullish’ territory the previous day.
So far this year, UNP, NVCR and CSX stocks have gained between 31% and 54%.
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