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Norfolk Southern
(NYSE:NSC)
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Rating:68Neutral
Price Target:
$332.00
▲(9.80% Upside)
Action:Downgraded
Date:06/01/26
NSC scores highest on financial quality (strong margins and cash conversion) but is held back by leverage and a mature/slow-growth revenue profile. The latest earnings call was constructive on cost discipline and efficiency, yet near-term fuel and demand/mix pressures remain. Technicals are mixed with softer short-term momentum, and valuation looks somewhat expensive for the current growth backdrop.
Positive Factors
Cash generation & conversion
Norfolk Southern’s operating cash flow and free cash flow sustainably exceed reported earnings, indicating strong cash conversion. Durable cash generation supports reinvestment, dividends, and servicing obligations, providing a structural buffer against cyclical volume slumps and funding for productivity programs.
Negative Factors
Elevated leverage
Leverage at roughly one times equity constrains financial flexibility if volumes or yields deteriorate. Elevated debt increases sensitivity to higher interest costs and limits headroom for discretionary capital allocation or merger-related costs, leaving less buffer to absorb prolonged operational shocks.
Read all positive and negative factors
Positive Factors
Negative Factors
Cash generation & conversion
Norfolk Southern’s operating cash flow and free cash flow sustainably exceed reported earnings, indicating strong cash conversion. Durable cash generation supports reinvestment, dividends, and servicing obligations, providing a structural buffer against cyclical volume slumps and funding for productivity programs.
Read all positive factors
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 (NSC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$72.48B
Dividend Yield1.85%
Average Volume (3M)1.23M
Price to Earnings (P/E)27.1
Beta (1Y)0.68
Revenue Growth0.60%
EPS Growth-19.01%
CountryUS
Employees19,600
SectorIndustrials
Sector Strength72
IndustryRailroads
Share Statistics
EPS (TTM)11.87
Shares Outstanding224,594,000
10 Day Avg. Volume1,152,411
30 Day Avg. Volume1,227,281
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 Cap1.15
Enterprise Value/Revenue6.83
Enterprise Value/Gross Profit15.08
Enterprise Value/Ebitda15.08
Forecast
1Y Price Target
$336.67Price Target Upside11.34% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering14
EPS Forecast (FY)12.25
Revenue Forecast (FY)$12.77B
Norfolk Southern Business Overview & Revenue Model
Company Description
Norfolk Southern Corporation (NSC), operating through its various subsidiaries, is a prominent rail transport provider in the United States. The company's core business involves the conveyance of raw materials, semi-finished goods, and completed m...
How the Company Makes Money
Norfolk Southern primarily makes money by charging customers to transport freight over its rail network. Its revenue is generated from freight rail services across major commodity groups, including: (1) Intermodal: moving shipping containers and t...
Norfolk Southern Earnings Call Summary
Earnings Call Date:Apr 24, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jul 23, 2026
Earnings Call Sentiment Neutral
The call presented a mix of clear operational and safety successes — including substantial productivity gains, record fuel-efficiency, and meaningful safety improvements — balanced against top-line pressures (flat revenue and modestly lower volumes), significant near-term fuel cost shocks, and intermodal and coal mix headwinds. Management expressed confidence in cost control, guidance, and the strategic merger refile, while acknowledging fuel-driven volatility and competitive/market uncertainties. Overall, operational execution and productivity mitigate many of the financial headwinds but risks remain tied to fuel and demand.Positive Updates
Safety Performance Improvement
FRA accident ratio improved to 1.43 in Q1, a 37% improvement year-over-year; FRA personal injury ratio was 1.10 (consistent with FY2025); FRA mainline accident ratio was 0.26, leading Class I mainline incident reliability.
Negative Updates
Top-Line and Volume Pressure
Overall volume finished down 1% year-over-year; revenue ended the quarter flat year-over-year, contributing to a modest EPS reduction versus prior year.
Read all updates
Q1-2026 Updates
Positive
Negative
Safety Performance Improvement
FRA accident ratio improved to 1.43 in Q1, a 37% improvement year-over-year; FRA personal injury ratio was 1.10 (consistent with FY2025); FRA mainline accident ratio was 0.26, leading Class I mainline incident reliability.
Read all positive updates
Company Guidance
Management reiterated its 2026 adjusted operating cost envelope of $8.2–$8.4 billion and said it will maintain current cost guidance despite near‑term fuel volatility; Q1 adjusted operating ratio was 68.7% and adjusted EPS was $2.65. Year‑over‑year the OR widened ~80 basis points, with inflation and fuel headwinds accounting for roughly a 280‑basis‑point impact, while total costs were up ~1%. Fuel was a major driver—fuel expense ran about $31 million higher versus last year and March alone was more than $40 million above expectations (March fuel price per gallon ~45% higher YoY)—and management expects fuel to be a Q2 headwind but still anticipates normal seasonality with roughly a 200‑basis‑point sequential OR improvement into Q2. The company plans $150+ million of efficiencies in 2026 on top of the $500+ million of productivity delivered over the past two years and said it will refile the merger application by month‑end.Norfolk Southern Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
70
Positive
Cash Flow
74
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 12.19B | 12.18B | 12.12B | 12.16B | 12.74B | 11.14B |
| Gross Profit | 5.52B | 5.17B | 3.76B | 2.81B | 4.73B | 4.37B |
| EBITDA | 5.52B | 5.85B | 5.49B | 4.34B | 6.04B | 5.71B |
| Net Income | 2.67B | 2.87B | 2.62B | 1.83B | 3.27B | 3.00B |
Balance Sheet | ||||||
| Total Assets | 45.11B | 45.24B | 43.68B | 41.65B | 38.88B | 38.49B |
| Cash, Cash Equivalents and Short-Term Investments | 1.34B | 1.53B | 1.64B | 1.57B | 456.00M | 839.00M |
| Total Debt | 17.10B | 17.09B | 17.48B | 17.57B | 15.59B | 14.25B |
| Total Liabilities | 29.31B | 29.69B | 29.38B | 28.87B | 26.15B | 24.85B |
| Stockholders Equity | 15.80B | 15.55B | 14.31B | 12.78B | 12.73B | 13.64B |
Cash Flow | ||||||
| Free Cash Flow | 3.82B | 2.16B | 1.67B | 830.00M | 2.27B | 2.79B |
| Operating Cash Flow | 3.75B | 4.36B | 4.05B | 3.18B | 4.22B | 4.25B |
| Investing Cash Flow | -1.75B | -2.56B | -2.78B | -2.18B | -1.60B | -1.22B |
| Financing Cash Flow | -1.67B | -1.91B | -1.20B | 115.00M | -3.00B | -3.31B |
Norfolk Southern Technical Analysis
Positive
302.38
Price Trends
312.46
Positive
305.54
Positive
296.27
Positive
Market Momentum
2.50
Negative
61.90
Neutral
93.13
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 302.38 is below the 20-day moving average (MA) of 311.09, below the 50-day MA of 312.46, and above the 200-day MA of 296.27, indicating a bullish trend. The MACD of 2.50 indicates Negative momentum. The RSI at 61.90 is Neutral, neither overbought nor oversold. The STOCH value of 93.13 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 29 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 | $26.95B | 43.06 | 17.30% | 0.89% | 0.58% | 17.20% | |
72 Outperform | $167.58B | 23.22 | 40.38% | 2.32% | 1.87% | 9.41% | |
71 Outperform | $90.84B | 29.77 | 23.52% | 1.42% | -0.92% | -2.64% | |
70 Outperform | $74.68B | 16.88 | 15.76% | 1.94% | 7.73% | ― | |
68 Neutral | $72.48B | 27.12 | 17.43% | 1.85% | 0.60% | -19.01% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
58 Neutral | $94.06B | 17.77 | 33.03% | 6.55% | -2.59% | -9.78% |
* Industrials Sector Average
NSC
Norfolk Southern
321.90
65.46
25.53%
CSX
CSX
48.81
15.89
48.25%
FDX
FedEx
309.93
121.38
64.38%
JBHT
JB Hunt
277.74
126.15
83.22%
UNP
Union Pacific
282.59
51.30
22.18%
UPS
United Parcel
110.02
14.23
14.85%
Norfolk Southern Corporate Events
Business Operations and StrategyExecutive/Board ChangesM&A Transactions
Norfolk Southern Names Brian Barr Chief Operating Officer
Positive
Jun 1, 2026
Norfolk Southern has appointed Brian Barr as Chief Operating Officer effective June 1, 2026, succeeding John Orr, who decided to step down from the Executive Vice President and COO role. Barr, who joined Norfolk Southern in September 2024 to lead ...
Executive/Board ChangesShareholder Meetings
Norfolk Southern Shareholders Back Board, Governance at 2026 Meeting
Positive
May 8, 2026
At its 2026 annual meeting of shareholders held on May 7, 2026, Norfolk Southern investors elected twelve directors to one-year terms, with all nominees receiving strong majorities despite some variation in opposition levels. The results indicate ...
Business Operations and StrategyFinancial Disclosures
Norfolk Southern Reports Flat Revenue, Lower Q1 2026 Earnings
Negative
Apr 24, 2026
On April 24, 2026, Norfolk Southern reported first-quarter 2026 revenue of $3.0 billion, essentially flat year over year on a 1% volume decline, with income from railway operations falling 23% to $877 million and operating ratio deteriorating to 7...
Business Operations and StrategyPrivate Placements and Financing
Norfolk Southern Renewing Atlanta Headquarters Lease Financing Agreement
Neutral
Apr 2, 2026
On April 1, 2026, Norfolk Southern, via Norfolk Southern Railway, renewed the lease of its Atlanta corporate headquarters building for a new five-year base term under amended and restated arrangements with BA Leasing BSC, which becomes the sole co...
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.