CSX Corporation has inked a deal to acquire US-based regional railroad system, Pan Am Railways in New England region. The supplier of rail-based freight transportation services did not disclose the financial terms of the deal.
The transaction will expand CSX’s (CSX) footprint in Connecticut, New York and Massachusetts and will add the states of Vermont, New Hampshire and Maine regions to its existing network, the company said. The deal “will provide significant benefits to shippers and local communities as CSX integrates Pan Am into its best-in-class network,” the company added.
CSX’s CEO James M. Foote said “In Pan Am, CSX gains a strong regional rail network in one of the most densely populated markets in the U.S., creating new efficiencies and market opportunities for customers as we continue to grow. We intend to bring CSX’s customer-centric focus and industry-leading operating model to shippers and industries served by Pan Am.” He added that “We look forward to integrating Pan Am into CSX, with substantial benefits to the rail-served industries of the Northeast, and to working in partnership with connecting railroads to provide exceptional supply chain solutions to New England and beyond.” (See CSX stock analysis on TipRanks)
On Nov. 30, Deutsche Bank analyst Amit Mehrotra raised the stock’s price target to $105 (16.6% upside potential) from $97 and maintained a Buy rating. The analyst said that his “long-held bullish stance on Transportation equities continues unabated in 2021.” Mehrotra is also optimistic that the company will deliver upbeat earnings, given the “positive inflection” in the U.S. industrial economy, improving housing demand, and inventory restocking.
Like Mehrotra, most of the Street also has a bullish outlook on the stock. The Strong Buy analyst consensus is based on 14 Buys and 2 Holds. The average price target stands at $93.31 and implies upside potential of about 3.6% to current levels. Shares have gained by 24.5% year-to-date.
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