Norfolk Southern (NSC) AI Stock Analysis

• Market Cap: $71.31B
• Dividend Yield: 1.85%
• Average Volume (3M): 1.46M
• Price to Earnings (P/E): 22.2
• Beta (1Y): 0.77
• Revenue Growth: 0.48%
• EPS Growth: 22.88%
• Country: US
• Employees: 19,600
• Sector: Industrials
• Sector Strength: 72
• Industry: Railroads
• EPS (TTM): 3.30
• Shares Outstanding: 244,708,450
• 10 Day Avg. Volume: 1,562,645
• 30 Day Avg. Volume: 1,458,453
• PEG Ratio: 0.46
• Price to Book (P/B): 3.71
• Price to Sales (P/S): 4.38
• P/FCF Ratio: 31.76
• Enterprise Value/Market Cap: 1.17
• Enterprise Value/Revenue: 6.80
• Enterprise Value/Gross Profit: 19.97
• Enterprise Value/Ebitda: 13.85
• 1Y Price Target: $311.55
• Price Target Upside: 6.84% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 13
• EPS Forecast (FY): 12.11
• Revenue Forecast (FY): $12.24B

• Rating: 75 Outperform
• Price Target: $331.00 ▲(13.51% Upside)

Norfolk Southern's overall stock score reflects strong financial performance and potential strategic benefits from the proposed merger. However, the stock faces challenges from competitive pressures and macroeconomic headwinds, which impact revenue and valuation. Technical indicators suggest a cautious outlook, with neutral trends and moderate valuation metrics.

Positive Factors

Revenue Growth

Strong revenue growth indicates robust market demand and effective business operations, supporting long-term financial stability.

Operational Efficiency

Improved operational efficiency reduces costs and enhances profitability, contributing to sustained competitive advantage.

Merger Potential

The merger could create strategic synergies and expand market reach, potentially transforming the competitive landscape.

Negative Factors

Competitive Pressures

Increased competition could pressure margins and market share, challenging long-term revenue and profitability growth.

Debt Levels

Rising debt levels may limit financial flexibility and increase risk, potentially affecting future investment and growth capacity.

Intermodal Volume Decline

Declining intermodal volumes could signal weakening demand in a key segment, impacting revenue and market positioning.

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 comprising soybeans, wheat, corn, fertilizers, livestock and poultry feed, food products, food oils, flour, sweeteners, ethanol, lumber and wood products, pulp board and paper products, wood fibers, wood pulp, scrap paper, beverages, canned goods, and consumer products; chemicals consist of sulfur and related chemicals, petroleum products, chlorine and bleaching compounds, plastics, rubber, industrial chemicals, chemical wastes, and sand; metals and construction materials, such as steel, aluminum products, machinery, scrap metals, cement, aggregates, minerals, clay, transportation equipment, and military-related products; and automotive, including finished motor vehicles and automotive parts, as well as coal. It also transports overseas freight through various Atlantic and Gulf Coast ports; and provides commuter rail passenger transportation services and operates an intermodal network. As of December 31, 2021, the company operated approximately 19,300 route miles in 22 states and the District of Columbia. Norfolk Southern Corporation was incorporated in 1980 and is based in Atlanta, Georgia.

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 NSC include intermodal services, where containers are transferred between rail and trucks, and carload services, which involve transporting specific goods in railcars. Additional revenue comes from the transportation of coal, automotive products, and other general merchandise. The company also benefits from strategic partnerships with shipping companies and logistics providers, enhancing its service offerings and operational efficiency. Economic factors such as freight demand, fuel prices, and regulatory changes also significantly influence its earnings.

Norfolk Southern Financial Statement Overview

Summary

Norfolk Southern exhibits strong financial health with robust revenue growth and profitability. The company benefits from efficient operations and a solid equity base. However, increasing debt levels pose a potential risk if not managed carefully.

Income Statement

Norfolk Southern's income statement shows strong profitability with a gross profit margin of 34.05% and a net profit margin of 24.22% for TTM. The company has demonstrated significant revenue growth of 42.7% TTM, indicating robust top-line expansion. EBIT and EBITDA margins are healthy at 37.81% and 49.11%, respectively, reflecting efficient operational management. However, the revenue growth rate has been volatile over the years, with periods of decline.

Balance Sheet

The balance sheet reveals a moderate debt-to-equity ratio of 1.13 TTM, indicating a balanced approach to leverage. Return on equity is strong at 20.17%, showcasing effective use of shareholder funds. The equity ratio stands at 33.96%, suggesting a solid equity base. While the company maintains a stable financial position, the increasing debt levels over recent years could pose a risk if not managed carefully.

Cash Flow

Cash flow analysis shows a positive trend with a free cash flow growth rate of 3.71% TTM. The operating cash flow to net income ratio is 1.21, indicating strong cash generation relative to earnings. The free cash flow to net income ratio is 0.49, reflecting a healthy conversion of earnings into cash. Despite some fluctuations in free cash flow growth in previous years, the current trajectory is positive.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	12.23B	12.12B	12.16B	12.74B	11.14B	9.79B
Gross Profit	4.16B	3.76B	2.81B	4.73B	4.37B	3.40B
EBITDA	6.01B	5.49B	4.34B	6.04B	5.71B	4.31B
Net Income	2.96B	2.62B	1.83B	3.27B	3.00B	2.01B
Balance Sheet
Total Assets	44.58B	43.68B	41.65B	38.88B	38.49B	37.96B
Cash, Cash Equivalents and Short-Term Investments	1.42B	1.64B	1.57B	456.00M	839.00M	1.11B
Total Debt	17.08B	17.48B	17.57B	15.59B	14.25B	13.11B
Total Liabilities	29.44B	29.38B	28.87B	26.15B	24.85B	23.17B
Stockholders Equity	15.14B	14.31B	12.78B	12.73B	13.64B	14.79B
Cash Flow
Free Cash Flow	2.10B	1.67B	830.00M	2.27B	2.79B	2.14B
Operating Cash Flow	4.25B	4.05B	3.18B	4.22B	4.25B	3.64B
Investing Cash Flow	-1.91B	-2.78B	-2.18B	-1.60B	-1.22B	-1.18B
Financing Cash Flow	-1.90B	-1.20B	115.00M	-3.00B	-3.31B	-1.93B

Norfolk Southern Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 291.60
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 291.6 is below the 20-day moving average (MA) of 292.93, above the 50-day MA of 287.36, and above the 200-day MA of 262.90, indicating a neutral trend. The MACD of 1.59 indicates Positive momentum. The RSI at 51.75 is Neutral, neither overbought nor oversold. The STOCH value of 21.66 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NSC.

Norfolk Southern Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FDX	79 Outperform	$67.90B	15.93	15.87%	1.96%	3.09%	14.94%
CSX	78 Outperform	$67.97B	23.73	22.60%	1.42%	-3.80%	-17.32%
NSC	75 Outperform	$71.31B	22.23	20.46%	1.85%	0.48%	22.88%
UNP	72 Outperform	$138.94B	19.88	41.62%	2.32%	1.06%	8.21%
UPS	72 Outperform	$86.47B	15.75	33.67%	6.51%	-1.25%	-2.25%
JBHT	67 Neutral	$18.82B	34.21	15.13%	0.88%	-1.60%	4.87%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

Norfolk Southern Corporate Events

Norfolk Southern, Union Pacific Seek Approval for Transcontinental Merger

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 railroad, following a July 29, 2025 merger agreement that received overwhelming shareholder support. The proposed end-to-end combination would link the companies’ Western and Eastern U.S. systems into a 50,000‑route‑mile network spanning 43 states, converting roughly 10,000 existing interline lanes into faster single-line service, cutting an estimated 2,400 daily rail car and container handlings and 60,000 car‑miles, and shifting about 2 million truckloads annually from highways to rail. Management highlights potential public and commercial benefits including enhanced rail competition in major corridors, improved access to global markets via more than 100 ports and 10 international gateways, lower roadway congestion and emissions, and a new single-line rail option for historically underserved “Watershed” markets. For customers, the plan promises new and faster intermodal and manifest routes, expanded rail alternatives to trucking, better utilization of customer-owned rail equipment, a unified digital and commercial interface, streamlined pricing through a Committed Gateway Pricing framework, and preservation of all existing union jobs with the prospect of roughly 900 net new union positions by year three, supported by about $2.1 billion in incremental capital investment and anticipated capital synergies.

Norfolk Southern Shareholders Approve Union Pacific Merger

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 the U.S. This merger is expected to enhance rail competitiveness, preserve union jobs, and stimulate economic growth by offering improved shipping alternatives. The transaction, which involves Norfolk Southern shareholders receiving Union Pacific shares and cash, is anticipated to close by early 2027, pending regulatory approvals.

Norfolk Southern Faces Legal Challenges in Merger

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, with three lawsuits filed alleging disclosure deficiencies in the merger documents. Despite these challenges, both companies believe the allegations are without merit and are proceeding with the merger, supplementing disclosures to address the claims.

Norfolk Southern Reports Q3 2025 Financial Results

On October 23, 2025, Norfolk Southern Corporation announced its third-quarter financial results for 2025, reporting a revenue of $3.1 billion and an income from railway operations of $1.1 billion. Despite a decrease in income from railway operations compared to the previous year due to a $380 million benefit from railway line sales in 2024, the company achieved a record in fuel efficiency and executed a significant land sale expected to boost future rail volumes. Adjusted results showed a slight improvement in operating ratio and earnings per share compared to the previous year, reflecting the company’s focus on safety, service, and productivity amidst a dynamic freight market.

Norfolk Southern Approves Executive Retention Awards Amid Merger

On September 23, 2025, Norfolk Southern‘s Board of Directors approved one-time cash retention awards for its named executive officers as part of a transaction bonus program. This initiative, linked to the merger agreement with Union Pacific Corporation, aims to ensure leadership stability and focus amid the merger’s uncertainty, benefiting the company’s stakeholders.