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Norfolk Southern Corp (NSC)
:NSC
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Norfolk Southern
(NYSE:NSC)
75Outperform
Positive Factors
Financial Performance
Norfolk Southern reported first-quarter adjusted earnings per share of $2.69, which exceeded the consensus estimate, demonstrating strong financial performance despite challenges.
Market Share
Norfolk Southern's service rebound is enabling it to win business, customers, and market share, with volumes up 7%.
Negative Factors
Export Coal
Weak seaborne prices are anticipated to pressure export coal volumes and revenue per unit.
Market Uncertainty
Uncertainty in the market related to tariffs and trade policy is acknowledged, affecting the overall guide.
Norfolk Southern (NSC) vs. S&P 500 (SPY)
Market Cap
$54.96B
Dividend Yield2.19%
Average Volume (3M)1.41M
Price to Earnings (P/E)16.8
Beta (1Y)0.92
Revenue Growth0.70%
EPS Growth135.08%
CountryUS
Employees19,600
SectorIndustrials
Sector Strength91
IndustryRailroads
Share Statistics
EPS (TTM)2.69
Shares Outstanding225,443,500
10 Day Avg. Volume1,137,362
30 Day Avg. Volume1,406,519
Financial Highlights & Ratios
PEG Ratio0.79
Price to Book (P/B)3.48
Price to Sales (P/S)0.00
P/FCF Ratio26.67
Enterprise Value/Market Cap1.21
Enterprise Value/Revenue1.37
Enterprise Value/Gross Profit14.07
Enterprise Value/Ebitda2.82
Forecast
1Y Price Target
$264.22Price Target Upside8.39% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering18
Norfolk Southern Business Overview & Revenue Model
Company DescriptionNorfolk Southern Corporation (NSC) is a major American transportation service provider, primarily operating within the railway sector. The company is one of the largest freight rail networks in North America, offering comprehensive rail transportation solutions. Its core services include the transportation of raw materials, intermediate products, and finished goods across a vast network that spans the eastern United States. Norfolk Southern focuses on key freight categories such as intermodal, automotive, coal, agriculture, chemicals, and metals, serving diverse industries and markets.
How the Company Makes MoneyNorfolk Southern makes money primarily through freight transportation services across its extensive rail network. Its key revenue streams include intermodal transport, which involves moving shipping containers and trailers via rail, and the transportation of bulk commodities such as coal, agriculture products, chemicals, and metals. The company also generates revenue through contracts and partnerships with various industries that rely on its rail services to move goods efficiently. Additionally, Norfolk Southern benefits from its strategic location and connections, which facilitate the efficient transfer of goods to major ports and industrial centers, thereby enhancing its competitive position in the freight transportation market.
Norfolk Southern Key Performance Indicators (KPIs)
Any
Revenue by Segment
Analyzes income from different business segments, highlighting which areas drive growth and profitability, and indicating potential vulnerabilities or strengths in the company's operational focus.
Analyzes income from different business segments, highlighting which areas drive growth and profitability, and indicating potential vulnerabilities or strengths in the company's operational focus.
Data provided by:
Main Street Data
Main Street DataNorfolk Southern Financial Statement Overview
Summary
Norfolk Southern demonstrates solid financial health with strong profitability and efficient cash flow management. While revenue growth has plateaued, profitability metrics remain high, and the balance sheet is well-structured with manageable leverage. Continued focus on revenue expansion and careful debt management will be crucial for sustaining long-term growth.Income Statement
Norfolk Southern shows robust profitability with a strong gross profit margin of 45.3% and a net profit margin of 27.4% TTM (Trailing-Twelve-Months). EBIT and EBITDA margins are also healthy at 41.1% and 50.3% respectively. However, revenue growth has been stagnant, with a slight decline in total revenue over the recent periods, which may signal challenges in expanding market reach or competitive pressures.78
Positive
Balance Sheet
The balance sheet indicates solid equity with a debt-to-equity ratio of 1.19 and an equity ratio of 33.1% TTM. Return on Equity is commendable at 22.9%, reflecting effective use of shareholder funds. The company's substantial debt load is balanced by strong equity, yet the relatively high leverage could pose risks if market conditions change.75
Positive
Cash Flow
Cash flow performance is strong, with a free cash flow to net income ratio of 0.70 TTM, highlighting efficient cash conversion. Operating cash flow to net income ratio stands at 1.25, indicating robust cash generation relative to net income. Though free cash flow growth has been inconsistent, the company maintains healthy operational cash flows.82
Very Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 12.11B | 12.12B | 12.16B | 12.74B | 11.14B | 9.79B | Gross Profit |
| 4.73B | 4.54B | 5.38B | 5.52B | 4.99B | 4.04B | EBIT |
| 4.98B | 4.07B | 2.85B | 4.81B | 4.45B | 3.00B | EBITDA |
| 6.47B | 4.07B | 4.34B | 6.04B | 5.71B | 4.63B | Net Income Common Stockholders |
| 3.32B | 2.62B | 1.83B | 3.27B | 3.00B | 2.01B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 1.01B | 1.64B | 1.57B | 456.00M | 839.00M | 1.11B | Total Assets |
| 43.80B | 43.68B | 41.65B | 38.88B | 38.49B | 37.96B | Total Debt |
| 17.21B | 17.48B | 17.57B | 15.18B | 13.84B | 12.68B | Net Debt |
| 16.21B | 15.84B | 16.00B | 14.73B | 13.00B | 11.57B | Total Liabilities |
| 29.29B | 29.38B | 28.87B | 26.15B | 24.85B | 23.17B | Stockholders Equity |
| 14.51B | 14.31B | 12.78B | 12.73B | 13.64B | 14.79B |
| Cash Flow | Free Cash Flow | ||||
| 1.89B | 1.67B | 830.00M | 2.27B | 2.79B | 2.14B | Operating Cash Flow |
| 4.16B | 4.05B | 3.18B | 4.22B | 4.25B | 3.64B | Investing Cash Flow |
| -1.96B | -2.78B | -2.18B | -1.60B | -1.22B | -1.18B | Financing Cash Flow |
| -1.85B | -1.20B | 115.00M | -3.00B | -3.31B | -1.93B |
Norfolk Southern Technical Analysis
Positive
243.77
Price Trends
227.54
Positive
236.33
Positive
243.09
Positive
Market Momentum
4.88
Negative
65.90
Neutral
95.17
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NSC, the sentiment is Positive. The current price of 243.77 is above the 20-day moving average (MA) of 228.42, above the 50-day MA of 227.54, and above the 200-day MA of 243.09, indicating a bullish trend. The MACD of 4.88 indicates Negative momentum. The RSI at 65.90 is Neutral, neither overbought nor oversold. The STOCH value of 95.17 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NSC.
Norfolk Southern Risk Analysis
Norfolk Southern disclosed 25 risk factors in its most recent earnings report. Norfolk Southern reported the most risks in the “Production” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Norfolk Southern Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $54.99B | 14.41 | 14.74% | 2.40% | 0.34% | -8.45% | |
75 Outperform | $54.96B | 16.81 | 24.52% | 2.19% | 0.70% | 135.08% | |
73 Outperform | $58.63B | 18.66 | 26.13% | 1.56% | -2.39% | -7.80% | |
71 Outperform | $85.80B | 14.78 | 35.96% | 6.44% | 1.30% | -0.76% | |
70 Outperform | $137.12B | 20.85 | 42.47% | 2.30% | 0.63% | 5.93% | |
68 Neutral | $14.69B | 26.88 | 13.97% | 1.17% | -3.82% | -12.80% | |
64 Neutral | $4.44B | 11.99 | 5.16% | 249.23% | 4.01% | -11.87% |
* Industrials Sector Average
Performance Comparison
NSC
Norfolk Southern
243.77
17.16
7.57%
CSX
CSX
31.21
-1.72
-5.22%
FDX
FedEx
226.12
-23.37
-9.37%
JBHT
JB Hunt
146.24
-16.12
-9.93%
UNP
Union Pacific
229.50
-8.77
-3.68%
UPS
United Parcel
99.11
-40.52
-29.02%
Norfolk Southern Earnings Call Summary
Earnings Call Date:Apr 23, 2025
(Q1-2025)
| % Change Since: 10.80%|
Next Earnings Date:Jul 23, 2025
Earnings Call Sentiment Neutral
Norfolk Southern experienced significant challenges due to weather-related disruptions, leading to increased costs. However, the company demonstrated resilience and operational efficiency, achieving notable EPS growth and labor productivity savings. Despite facing pressures from lower coal prices and economic uncertainty, the company's proactive cost management and service improvements present a balanced outlook.Q1-2025 Updates
Positive Updates
EPS Growth Amid Challenges
Norfolk Southern delivered 8% EPS growth on an adjusted basis, despite absorbing $35 million in storm restoration costs.
Labor Productivity Savings
The company achieved $55 million in labor productivity savings, contributing significantly to cost reductions.
Safety Improvements
The FRA injury ratio decreased by 13% year-over-year, and train accident frequency was reduced by 43%.
Intermodal Volume Increase
Intermodal volume increased by 3% year-over-year with gains in both domestic and international segments.
Zero-Based Operating Plan Benefits
The new operating plan led to a net reduction of over 100 weekly crew starts and improved fuel efficiency by 13% year-over-year.
Negative Updates
Storm Restoration Costs
The company incurred $35 million in extraordinary expenses due to winter storm impacts, negatively affecting the operating ratio.
Coal Revenue Pressure
Lower export coal prices drove RPU less fuel lower by 3%, affecting overall revenue performance.
Uncertain Economic Environment
There are concerns about potential tariffs and an uncertain economic environment, which may impact future revenue.
Company Guidance
In the Norfolk Southern Corporation's First Quarter 2025 Earnings Conference Call, the company reported several key metrics and projections. Despite facing significant winter disruptions, including 18 storms and $35 million in storm restoration costs, Norfolk Southern achieved an 8% growth in earnings per share (EPS) on an adjusted basis, supported by $55 million in labor productivity savings. The company maintained an adjusted operating ratio of 67.9%, even with the adverse weather impacts. Additionally, Norfolk Southern set a record for fuel efficiency for the fourth consecutive quarter with a 13% year-over-year improvement in horsepower per ton (HPT). The company is committed to a $150 million cost reduction for the full year and projects a 3% revenue growth alongside 150 basis points of operating ratio improvement, although it acknowledged the uncertainty in the market due to potential tariff impacts and broader economic conditions.Norfolk Southern Corporate Events
Shareholder Meetings
Norfolk Southern Holds Annual Shareholders Meeting
Neutral
May 9, 2025
On May 8, 2025, Norfolk Southern Corporation held its Annual Meeting of Shareholders, where thirteen directors were elected for one-year terms. Additionally, shareholders ratified the appointment of KPMG LLP as the independent registered public accounting firm for 2025 and approved an advisory resolution on executive compensation.
Spark’s Take on NSC Stock
According to Spark, TipRanks’ AI Analyst, NSC is a Outperform.
Norfolk Southern’s overall stock score reflects its stable financial performance, resilient earnings growth, and strategic operational improvements. The company’s challenges in revenue growth and broader economic uncertainties present risks, but its solid profitability and cash flow management provide a strong foundation. The technical analysis indicates caution, but the fair valuation and dividend yield offer additional investor appeal.
To see Spark’s full report on NSC stock, click here.
Business Operations and StrategyFinancial Disclosures
Norfolk Southern Reports Strong Q1 2025 Results
Positive
Apr 23, 2025
On April 23, 2025, Norfolk Southern Corporation announced its first-quarter results for 2025, reporting a revenue of $3.0 billion and an income from railway operations of $1.1 billion. Despite weather-related disruptions, the company achieved an 8% growth in adjusted net income and earnings per share, and maintained its full-year guidance amidst macro-economic uncertainties. The operating ratio improved to 61.7%, and the company credited its team for overcoming challenges to enhance service performance and customer confidence. Adjustments for the Eastern Ohio incident showed an income from railway operations of $961 million and an operating ratio of 67.9%, with insurance recoveries exceeding incremental costs.
Spark’s Take on NSC Stock
According to Spark, TipRanks’ AI Analyst, NSC is a Outperform.
Norfolk Southern’s overall stock score reflects a stable financial performance with strong profitability and cash flow management. Despite technical indicators suggesting a cautious outlook, the company benefits from strategic initiatives highlighted in the earnings call and recent corporate events. Valuation metrics indicate a fairly valued stock with reasonable dividends. Key strengths include solid income growth and operational improvements, while potential risks arise from revenue growth challenges and market uncertainties.
To see Spark’s full report on NSC stock, click here.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.