CSX Corp (CSX) will report earnings 10-16 after the close with the Street expecting $0.48 EPS and $3.68B in Revenues (+3%) while Q4 seen at $0.49/$3.74B and FY25 at $2.13/$15.355B implying 10.75% EPS growth and 3.7% Revenue growth next year. CSX shares have closed higher eight of its last ten earnings reports, a six-quarter average max move of 3.9%. CSX provides rail-based freight transportation services including traditional rail service, the transport of intermodal containers and trailers, as well as other transportation services such as rail-to-truck transfers and bulk commodity operations. CSX provides an important link to the transportation supply chain through its approximately 20,000 route-mile rail network and serves major population centers in 26 states east of the Mississippi River, the District of Columbia and the Canadian provinces of Ontario and Quebec. The merchandise business (59% revenues) is comprised of shipments in the following diverse markets: chemicals, agricultural and food products, automotive, minerals, forest products, metals and equipment, and fertilizers. The Intermodal business (14% Revenues) combines the superior economics of rail transportation with the flexibility of trucks and offers a cost and environmental advantage over long-haul trucking. Coal is 17% of revenues and trucking at 6%. Rail volumes showed signs of improvement in Q3 though some strikes and impacts of hurricanes could weigh on results.

CSX has a market cap of $68B and trades 16.45X Earnings, 11.4X EBITDA and 23.3X FCF with a 1.34% yield, valuation near the 70^th percentile of its 10-year range. Analysts have an average target of $39 and short interest is low at 1% of the float. Citi started shares at Buy last week with a $42 target.

CSX shares are near a key breakout level at $35 to work out of a multi-month base with a measured move to $38. CSX options are pricing in a 2.5% earnings move and 30-day IV Skew at +3.9 is steep compared to the 0.3 52-week average. CSX put/call open interest ratio is at the 9^th percentile and the average IV30 crush is -19.8%. CSX has recently seen 10,850 December 2026 $35 calls buy to open positioning for long-term upside. Closer-term, action is more mixed with January $30 puts 10,000X in open interest from buys, short January $35 and $37.5 calls, 3000 June $30 puts bought and some buys in June $35 and $27.5 puts.

Trade to Consider: Long CSX November/January $37.5 Call Calendar Spreads at $0.50 Debit