Is CSX Stock Riskier Than It Looks

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CSX (CSX) stock returned 46.3% over the past year, compared to 15.3% for the S&P 500. The railroad's revenue picked up as well, growing 12% in the third quarter of fiscal 2026. Yet part of that growth came from a charge that moves with a cost CSX does not set. What is that charge, and how much of the growth came from it?

About Half Of CSX's Growth Came From Fuel

During the October 21 call, management said fuel accounted for about half of CSX's revenue growth in the third quarter of fiscal 2026. Average diesel prices climbed nearly 50% from a year earlier, and management said a higher fuel surcharge drove the revenue gain alongside more freight and pricing gains.

CSX processed record volume through its intermodal business in the quarter, and the segment's revenue rose 20%. Yet management said the fuel surcharge accounted for essentially all of the 13% rise in revenue per unit.

Management flagged the risk itself. While guiding to fourth-quarter margins, the company said fuel volatility can create some near-term noise. An analyst on the same call asked how much extra fuel revenue the new surcharges brought in on tariff traffic, but management declined to put a precise number on it.

How Much Of CSX's Revenue Is Exposed?

The fuel component of the third quarter's revenue gain represents roughly $0.2 billion, or about 5% of revenue. Management detailed the effect only as a share of growth, as overall revenue climbed from $3.59 billion a year earlier to $4.02 billion. That expansion has accelerated rapidly. Revenue rose 1.7% from a year earlier in the first quarter of fiscal 2026, followed by a 10.1% increase in the second. Management has since raised its full-year 2026 guide for revenue growth to the high single digits, up from the mid to high single digits it provided previously.

CSX's underlying operations drove the other half of the third quarter's growth. The railroad moved 5% more freight than it did a year earlier. Within the merchandise segment, which includes traffic such as chemicals, metals and fertilizers, revenue per unit excluding fuel still rose more than 2%.

Buyers appear to be paying up for that growth. CSX closed on October 26 3.3% below its highest close of the past year. At that price, the stock traded at 26.5 times its last twelve months of earnings, compared to 22.9 for the S&P 500. The multiple sat at 24.0 at the end of September, already higher than at 32 of the 40 quarter ends since the end of 2016. The share price has risen about 10% since September 30, and on the same earnings it now trades at 26.5. That figure is still below the span's highest quarter-end multiple, 28.1 in mid-2017.

How Worried Should CSX Holders Be?

CSX holders face a real but contained risk. The fuel half of the growth moves with diesel prices. With the stock trading near its high and priced above the market, the share price appears to assume the faster growth lasts.

CSX stock has also fallen further than the market in three of four recent market shocks. It fell hardest during the 2022 inflation shock, losing 28% against 24% for the S&P 500. The shares dropped further than the index in both 2023 shocks as well. The stock held up better only during the 2025 tariff shock, falling 17% compared to 19%.

For the risk to be worth taking, CSX has to keep adding freight and raising prices even if diesel prices fall. Revenue growth, and how much of it management says came from fuel, is the measure to watch when CSX next reports, expected in January 2027.

Does This Mean You Should Act On CSX?

Our purpose is to inform you with unique data so you make the right investment decisions. That said, betting on a single stock is always risky, no matter which direction you choose.

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