Norfolk Southern (NSC)
NYSE:NSC
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Norfolk Southern
(NYSE:NSC)
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Rating:68Neutral
Price Target:
$316.00
▲(9.72% Upside)
Action:DowngradedDate:01/30/26
Score is driven primarily by solid financial quality (strong margins and improving free-cash-flow conversion) and a constructive earnings-call outlook focused on cost reduction and lower CapEx. The main offsets are muted/uneven revenue growth with intermodal and coal pressure, elevated leverage, and only neutral-to-mixed technical momentum.
Positive Factors
Free cash flow strength
Sustained free cash flow of $2.2B in 2025 materially improves Norfolk Southern’s financing flexibility. Durable cash generation supports maintenance and discretionary CapEx, funds productivity programs, underpins dividends/returns and gives buffer during cyclical demand weakness.
Negative Factors
Revenue softness and volume declines
Ongoing volume and revenue weakness reduces fixed-cost absorption in a capital-intensive business, pressuring the operating ratio and cash conversion. If volumes remain muted, network utilization and pricing leverage decline, constraining sustainable earnings growth over the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
Free cash flow strength
Sustained free cash flow of $2.2B in 2025 materially improves Norfolk Southern’s financing flexibility. Durable cash generation supports maintenance and discretionary CapEx, funds productivity programs, underpins dividends/returns and gives buffer during cyclical demand weakness.
Read all positive factors
Norfolk Southern (NSC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$64.68B
Dividend Yield1.85%
Average Volume (3M)1.44M
Price to Earnings (P/E)22.6
Beta (1Y)0.74
Revenue Growth0.48%
EPS Growth22.88%
CountryUS
Employees19,600
SectorIndustrials
Sector Strength72
IndustryRailroads
Share Statistics
EPS (TTM)3.22
Shares Outstanding224,572,020
10 Day Avg. Volume1,498,369
30 Day Avg. Volume1,438,995
Financial Highlights & Ratios
PEG Ratio2.24
Price to Book (P/B)4.17
Price to Sales (P/S)5.33
P/FCF Ratio30.09
Enterprise Value/Market Cap1.24
Enterprise Value/Revenue6.59
Enterprise Value/Gross Profit15.53
Enterprise Value/Ebitda13.72
Forecast
1Y Price Target
$314.58Price Target Upside9.23% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering13
EPS Forecast (FY)12.12
Revenue Forecast (FY)$12.49B
Norfolk Southern Business Overview & Revenue Model
Company Description
Norfolk Southern Corporation, together with its subsidiaries, engages in the rail transportation of raw materials, intermediate products, and finished goods in the United States. The company transports agriculture, forest, and consumer products co...
How the Company Makes Money
Norfolk Southern generates revenue primarily through the transportation of freight. Its revenue model is based on charging customers for the movement of goods via rail, which includes both bulk and intermodal shipments. The key revenue streams for...
Norfolk Southern Key Performance Indicators (KPIs)
Any
Revenue by Segment
Shows revenue generated from different business segments, highlighting which areas are driving growth and profitability, and helping assess the company's strategic focus and market position.
Shows revenue generated from different business segments, highlighting which areas are driving growth and profitability, and helping assess the company's strategic focus and market position.
Data provided by:
The Fly
The FlyNorfolk Southern Earnings Call Summary
Earnings Call Date:Jan 29, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 24, 2026
Earnings Call Sentiment Positive
Overall the call conveyed strong operational and safety progress — including industry-leading safety metrics, material productivity gains, meaningful cost takeouts, solid cash generation and capital execution — that materially offset soft top-line trends in Q4 (intermodal weakness, seaborne coal pricing, and a modest revenue headwind from competitor reactions to the merger). The regulatory setback on the merger and persistent macro/tariff uncertainties are notable challenges, but the company's execution on safety, efficiency and cash flow positions it to weather near-term demand weakness.Positive Updates
Safety Milestones
Zero reportable mainline derailments in Q4; mainline accident rate for the quarter dropped to 0.13 (71% improvement YoY). Full-year mainline derailment ratio 0.43 and Norfolk Southern reported its best year in more than a decade for train accident rates. FRA reportable injury ratio improved 15% to 1.0 and reportable accidents improved 31% to 2.19.
Negative Updates
Q4 Volume and Revenue Softness
Q4 overall volume declined ~4% and total revenue declined ~2% year-over-year. Management highlighted that Q4 volumes were softer than anticipated and top-line headwinds degraded the operating ratio despite expense discipline.
Read all updates
Q4-2025 Updates
Positive
Negative
Safety Milestones
Zero reportable mainline derailments in Q4; mainline accident rate for the quarter dropped to 0.13 (71% improvement YoY). Full-year mainline derailment ratio 0.43 and Norfolk Southern reported its best year in more than a decade for train accident rates. FRA reportable injury ratio improved 15% to 1.0 and reportable accidents improved 31% to 2.19.
Read all positive updates
Company Guidance
Norfolk Southern guided 2026 operating costs to a range of $8.2–$8.4 billion and set 2026 CapEx at approximately $1.9 billion (a 14% cut to the 2026 envelope and roughly $300 million lower vs. prior expectation, part of a two‑year $450 million planned capital reduction); it raised its 2026 cost‑takeout target from $100 million to $150 million (bringing three‑year cumulative cost takeout to ~ $650 million) and said it can accommodate a variety of volume scenarios (management cited roughly a 1 percentage‑point revenue headwind from enhanced competition but said it can handle growth of “several points” with strong incrementals). Management pointed to 2025 performance that underpins the plan — $2.2 billion in free cash flow (up ~ $500 million y/y), $2.2 billion CapEx in 2025 (down 7.5% vs. 2024), productivity gains (moved ~3% more GTMs with ~4% fewer employees, ~7% headcount productivity) — while flagging inflationary headwinds (~4% inflation, a 4% wage increase last July, >12% health & welfare increases and a ~25% insurance premium increase).Norfolk Southern Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
63
Positive
Cash Flow
78
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 12.18B | 12.12B | 12.16B | 12.74B | 11.14B |
| Gross Profit | 5.17B | 3.76B | 2.81B | 4.73B | 4.37B |
| EBITDA | 5.85B | 5.49B | 4.34B | 6.04B | 5.71B |
| Net Income | 2.87B | 2.62B | 1.83B | 3.27B | 3.00B |
Balance Sheet | |||||
| Total Assets | 45.24B | 43.68B | 41.65B | 38.88B | 38.49B |
| Cash, Cash Equivalents and Short-Term Investments | 1.53B | 1.64B | 1.57B | 456.00M | 839.00M |
| Total Debt | 17.09B | 17.48B | 17.57B | 15.59B | 14.25B |
| Total Liabilities | 29.69B | 29.38B | 28.87B | 26.15B | 24.85B |
| Stockholders Equity | 15.55B | 14.31B | 12.78B | 12.73B | 13.64B |
Cash Flow | |||||
| Free Cash Flow | 2.16B | 1.67B | 830.00M | 2.27B | 2.79B |
| Operating Cash Flow | 4.36B | 4.05B | 3.18B | 4.22B | 4.25B |
| Investing Cash Flow | -2.56B | -2.78B | -2.18B | -1.60B | -1.22B |
| Financing Cash Flow | -1.91B | -1.20B | 115.00M | -3.00B | -3.31B |
Norfolk Southern Technical Analysis
Neutral
288.00
Price Trends
299.01
Negative
293.48
Negative
284.58
Positive
Market Momentum
-4.74
Negative
43.69
Neutral
74.59
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NSC, the sentiment is Neutral. The current price of 288 is below the 20-day moving average (MA) of 288.48, below the 50-day MA of 299.01, and above the 200-day MA of 284.58, indicating a neutral trend. The MACD of -4.74 indicates Negative momentum. The RSI at 43.69 is Neutral, neither overbought nor oversold. The STOCH value of 74.59 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for NSC.
Norfolk Southern Risk Analysis
Norfolk Southern disclosed 28 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
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $145.21B | 19.20 | 41.95% | 2.32% | 1.06% | 8.21% | |
69 Neutral | $20.33B | 31.73 | 16.33% | 0.89% | -1.60% | 4.87% | |
68 Neutral | $64.68B | 22.59 | 19.16% | 1.85% | 0.48% | 22.88% | |
68 Neutral | $86.29B | 22.26 | 15.76% | 1.94% | 3.09% | 14.94% | |
67 Neutral | $76.65B | 23.39 | 22.90% | 1.42% | -3.80% | -17.32% | |
66 Neutral | $83.36B | 11.75 | 35.12% | 6.55% | -1.25% | -2.25% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
NSC
Norfolk Southern
288.00
84.11
41.25%
CSX
CSX
41.22
14.54
54.48%
FDX
FedEx
361.63
160.86
80.12%
JBHT
JB Hunt
214.91
84.28
64.52%
UNP
Union Pacific
244.71
39.58
19.29%
UPS
United Parcel
98.18
8.73
9.76%
Norfolk Southern Corporate Events
Business Operations and StrategyFinancial Disclosures
Norfolk Southern Reports Mixed Q4, Stronger Full-Year 2025
Positive
Jan 29, 2026
On January 29, 2026, Norfolk Southern reported its fourth-quarter and full-year 2025 results, showing modest top-line growth for the year alongside improved profitability despite a softer fourth quarter and a volatile macroeconomic backdrop. Fourt...
Business Operations and StrategyM&A TransactionsRegulatory Filings and Compliance
Norfolk Southern, Union Pacific Seek Approval for Transcontinental Merger
Positive
Dec 19, 2025
On December 19, 2025, Union Pacific and Norfolk Southern filed a nearly 7,000-page application with the Surface Transportation Board seeking approval to combine their networks and create what they describe as America’s first transcontinental...
M&A TransactionsShareholder Meetings
Norfolk Southern Shareholders Approve Union Pacific Merger
Positive
Nov 17, 2025
On November 14, 2025, Norfolk Southern Corporation announced that its shareholders overwhelmingly approved a merger with Union Pacific Corporation, marking a significant step towards creating the first coast-to-coast transcontinental railroad in t...
Legal ProceedingsM&A Transactions
Norfolk Southern Faces Legal Challenges in Merger
Negative
Nov 6, 2025
On July 28, 2025, Norfolk Southern Corporation entered into a merger agreement with Union Pacific Corporation, which will result in Norfolk Southern becoming a wholly owned subsidiary of Union Pacific. The merger process has faced legal challenges...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.