CSX Corporation heads into the final week of May with options traders the most bullishly positioned they have been in months — while short sellers quietly reduce exposure and analysts lift targets.
The shift in options sentiment is the standout this week. The put/call ratio has dropped to 0.41, almost 1.5 standard deviations below its 20-day average of 0.74. That is close to the most bullish reading of the past year, with the 52-week low sitting at 0.28. Six weeks ago, around late April, the PCR was running above 1.09 — firmly in defensive territory. The speed of that reversal tells you how quickly conviction has rebuilt after the Q1 earnings beat.
Short interest reinforces the less-crowded picture. Bears hold just 2.1% of the free float — one of the lower readings across Class I rails. That level has drifted down roughly 3.4% over the past month, a gentle but consistent unwind. The borrow market confirms the lack of stress: cost to borrow sits at 0.51%, barely changed week-on-week, and availability is effectively unlimited at nearly 10,000% of short interest. There is no mechanical pressure from the lending market in either direction.
The Street re-rated the stock decisively after the April 22 Q1 print, which delivered a 6.5% single-day gain. B of A Securities — the most recent to move — raised its target to $51 on May 19 while maintaining its Buy. That followed a broad wave of upgrades the morning after results: Wells Fargo lifted to $50 from $40, Barclays to $47 from $40, Baird to $47 from $40, TD Cowen to $45. The consensus mean target now sits near $45.89, fractionally below the current price of $46.61. With the stock already trading through most targets, the forward earnings growth story — factor scores rank 12-month EPS growth in the 92nd percentile — becomes more important than re-rating alone. The P/E is at 23.2x, up about 0.9% over the past week. The dividend score ranks in the 99th percentile, reflecting the company's consistent payout track record.
The bull case rests on pricing power and volume growth across CSX's diverse freight mix — coal, chemicals, intermodal, and automotive. Bears flag a slowing macro environment and the risk that flat pricing growth erodes the margin gains management has worked hard to deliver. The short score of 32.7 is modest and has barely moved over the past two weeks, suggesting short sellers are not building a thesis here with any urgency.
On the peer front, the week has been broadly constructive for transport names. CP added 5.2% on the week and R gained 7.4%, while UNP gave back 1.5%. CSX's 1.2% weekly gain is mid-pack — better than Union Pacific, slightly behind Norfolk Southern's flat performance. The CEO, Stephen Angel, bought $1M of stock at $40.27 in early March, a purchase that now looks well-timed as the shares trade nearly 16% above that level.
The next print is Q2 results on July 21. With the PCR at the lower end of its 12-month range and the stock trading just above consensus targets, the debate heading into that date will centre less on whether volume recovery is real and more on whether pricing and margin durability can justify further multiple expansion.
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