Susquehanna Financial analyst Bascome Majors thinks CSX Corp. had a pretty good year in 2023, but the Jacksonville-based company was overshadowed by big news from other major railroads.
As he looks to a strong year for rail stocks in 2024, Majors upgraded his rating on CSX from “neutral” to “positive,” the best rating among the five major railroad companies he covers.
“Rails’ pricing power should warrant a premium in 2024, and we’re slowly becoming U.S. rail bulls again,” Majors said in his Jan. 8 report.
“We upgrade CSX to Positive as the cleanest play on U.S. rail recovery, offering fewer lingering risks than Norfolk Southern Corp. and lower expectations than Union Pacific Corp.,” he said.
Norfolk Southern is still dealing with the aftermath of a derailment and chemical spill in Ohio last year and Union Pacific brought in a new CEO in July.
Investor attention was also focused on the merger of Canadian Pacific and Kansas City Southern last year, Majors said.
“We believe CSX’s consistent execution was sometimes overshadowed by those backdrops, with management delivering more resilient bottom-line performance than peers through rails’ broadly challenging period, the operating team delivering leading customer-facing service metrics through change in the COO suite, and rail outsider CEO Joe Hinrichs effectively selling a version of stakeholder capitalism CSX’s customers, employees, regulators, and shareholders can get behind,” he said.
Majors set a $42 price target for CSX, which was trading at $34.62 at the time of his report.
Truist Financial Corp. plans to close about 4% of its 2,006 bank branches in March as part of a $750 million cost-cutting initiative, according to a Jan. 3 story by American Banker newspaper.
However, the closings will not affect the bank’s offices in the Jacksonville metropolitan area, a spokesman said.
Charlotte, North Carolina-based Truist was formed by the 2019 merger of SunTrust Banks Inc. and BB&T Corp.
The company announced in July it would move its Downtown Jacksonville office from the 18-story Truist Tower at 200 W. Forsyth St. to the 10-story Hanania Place on the Southbank.
But no other changes are planned in Jacksonville, spokesman Brian Davis said by email.
Truist operated 26 branches in the Jacksonville area as of June 30, according to the Federal Deposit Insurance Corp.
Davis said the company is planning to close 11 branches in other parts of the state. Florida is Truist’s largest market with 452 branches, according to the FDIC.
Truist announced its plan for $750 million in expense cuts in September.
Raymond James analyst Michael Rose said in a Jan. 5 outlook report on banks that he is maintaining an “outperform” rating on Truist, while slightly lowering his earnings estimates.
“Despite the modest reduction, we continue to view risk-reward positively given proactive measures it has taken to address its fundamental performance juxtaposed with its discounted relative price-to-tangible book value valuation,” Rose said.
Bank stocks performed well late in 2023 and as fourth-quarter earnings reports come out in the next few days, those companies will be watched closely, Michael Rose and other Raymond James analysts said in that outlook report.
“It is now show-me time for the banks as they release results following the very strong outperformance of the bank indexes during the quarter as sentiment improved and institutional interest increased,” they said.
“Notably, the bond rally during the quarter played a key role in such outperformance as yields on longer duration U.S. Treasuries declined while the Federal Reserve was open to the possibility of rate cuts in the coming year.”
The analysts said the rate cuts have alleviated concerns about credit quality on the banks’ loans.
“While fourth quarter EPS results may not match 4Q bank stock performance, management’s 2024 outlooks will likely determine if the bank stock rally lasts,” they said.
Rose downgraded the rating of one bank with a significant presence in the Jacksonville market, SouthState Corp., from “outperform” to “market perform.”
“While we continue to view SouthState as one of the strongest companies in our coverage universe from a fundamental perspective given solid growth potential, relatively benign credit trends/strong reserve levels, above-peer profitability, robust capital generation/flexibility, and underlying strength of its markets, we see little in the way to materially drive further re-rating versus peers,” Rose said.
Winter Haven-based SouthState has eight branches in the Jacksonville market, according to the FDIC.
Treace Medical Concepts Inc. said Jan. 8 its 2023 revenue grew by about 32% to a range of $186.7 million to $187.1 million, above its previous forecast range of $182 million to $186 million.
Treace Medical will report final results for the year Feb. 27.
The Ponte Vedra-based company, which provides a treatment system for bunions, said the number of surgeons using its system grew by 20% last year to 2,855.
CEO John Treace said in a news release that the company is growing with new technologies to treat foot issues beyond its initial bunion treatment system.
“We look forward to aggressively pursuing these significant opportunities to drive the performance of the business and believe we have all the elements in place to deliver strong growth and sustained market penetration in 2024 and beyond,” he said.
Tegna Inc. announced Jan. 2 it signed a multiyear deal with NBC to renew its network affiliation for WTLV TV-12 and 19 other stations around the country.
Tysons, Virginia-based Tegna also owns Jacksonville ABC affiliate WJXX TV-25 and has a total of 64 television stations in 51 U.S. markets.
The company said it is the largest independent owner of NBC affiliates and its 20 network stations cover more than 21 million households, or almost 17% of U.S. television households.
Tegna did not announce terms of the agreement, including the length.
Tegna has been locked in a contract dispute with DirecTV which has kept its stations, including WTLV and WJXX, off of the satellite service since Nov. 30.
Neither party has said anything about negotiations for a new contract since then.
La Rosa Holdings Corp. said Jan. 4 it acquired its Jacksonville franchisee, La Rosa Realty North Florida LLC.
Celebration-based La Rosa is a holding company for several real estate businesses. The North Florida franchise provided residential and commercial real estate brokerage services.
The company said the North Florida franchise generated revenue of $4.3 million in 2022, with positive cash flow from operations.
La Rosa reported total revenue of $20.3 million in the first nine months of 2023. It did not say what the North Florida franchise produced in 2023 revenue.
In a Securities and Exchange Commission filing, La Rosa said it paid $1.13 million in cash and stock to acquire the business.
La Rosa went public in October and trades on the Nasdaq market under the ticker symbol “LRHC.”
“We continue to successfully implement our roll-up strategy of acquiring profitable franchisees, consolidating our position in the market and creating value for both shareholders and clients,” CEO Joe La Rosa said in a news release.
“We have several more franchisees in the pipeline that we plan on acquiring over the next several months, which brings us closer to our goal of reaching an annualized revenue run rate of $100 million before the end of 2024,” he said.
St. Augustine-based DLP Capital said Jan. 2 it acquired two hospitality/RV campground resorts in the Ozark Mountains near St. Louis.
The real estate investment and financial services firm said the deal adds to its outdoor hospitality portfolio, which includes a property in Ocala and another property under development in Callahan.
DLP is introducing the brand name of Dream Outdoor Resorts for its portfolio.
“We have long been known for building thriving multifamily communities, and we’re now leveraging our development and operating expertise to enhance the outdoor resort experience,” DLP Chief Executive Don Wenner said in a news release.
DLP did not announce terms of its latest acquisitions of Ozark Outdoors and Blue Springs Ranch.
Besides its outdoor resorts business, DLP is partnering with JWB Real Estate Capital in a company called Gateway Jax, which plans to redevelop more than 20 blocks in Downtown Jacksonville.
Wenner and other investors also acquired Community State Bank in Starke in September 2022 and renamed the bank DLP Bank.
Safe & Green Holdings Corp. had $14.6 million in revenue in the first nine months of 2023 but in a Jan. 3 letter to shareholders, CEO Paul Galvin outlined a large pipeline of projects in the works.
“With a robust construction pipeline exceeding $800 million and record growth, we have expanded our manufacturing capabilities to meet the increasing demand,” Galvin said.
Safe & Green, formerly known as SG Blocks, converts cargo shipping containers into buildings.
The company moved its headquarters office from Brooklyn, New York, to Jacksonville in January 2022.
In January 2023, it announced it was moving the headquarters to Miami.
After it moved out of Jacksonville, Safe & Green spun off its real estate development subsidiary into a separate public company called Safe and Green Development Corp.
In the shareholder letter, Galvin said Safe & Green operates two factories, has a third in the design phase and a fourth in a planning phase.
“Our revenue from manufacturing and construction services has grown substantially and we are confident in the scalability of our business model and eager to continue expanding our presence across the United States,” he said.