Norfolk Southern (NSC) AI Stock Analysis

• Market Cap: $61.11B
• Dividend Yield: 1.98%
• Average Volume (3M): 2.45M
• Price to Earnings (P/E): 18.4
• Beta (1Y): 0.89
• Revenue Growth: 0.71%
• EPS Growth: 86.84%
• Country: US
• Employees: 19,600
• Sector: Industrials
• Sector Strength: 71
• Industry: Railroads
• EPS (TTM): 3.29
• Shares Outstanding: 224,354,310
• 10 Day Avg. Volume: 1,812,819
• 30 Day Avg. Volume: 2,445,666
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.21
• Enterprise Value/Revenue: 6.05
• Enterprise Value/Gross Profit: 16.77
• Enterprise Value/Ebitda: 11.32
• 1Y Price Target: $299.23
• Price Target Upside: 9.87% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 14

• Rating: 79 Outperform
• Price Target: $323.00 ▲(18.59% Upside)

Norfolk Southern's overall stock score reflects its strong financial performance, favorable technical indicators, and strategic corporate developments. The major merger announcement is a key positive factor, enhancing future growth prospects. While economic uncertainties and coal revenue pressures pose challenges, the company's proactive management and operational efficiencies provide a solid foundation for stability and growth.

Positive Factors

Major Merger Announcement

The merger with Union Pacific is expected to enhance Norfolk Southern's market position and operational capabilities, providing long-term growth opportunities and transforming the U.S. supply chain.

Strong Cash Flow Management

Strong cash flow management supports Norfolk Southern's operational and financial stability, enabling the company to invest in growth opportunities and maintain resilience against economic challenges.

Operational Efficiency

Improved operational efficiency through labor productivity savings enhances Norfolk Southern's cost structure, supporting profitability and competitive positioning in the rail industry.

Negative Factors

Coal Revenue Pressure

Declining coal revenue due to lower prices poses a challenge to Norfolk Southern's revenue diversification, impacting its ability to maintain stable income from this segment.

Moderate Leverage

While leverage remains manageable, it could pose a risk if not carefully managed, potentially limiting Norfolk Southern's financial flexibility and ability to respond to market changes.

Uncertain Economic Environment

Economic uncertainties, including potential tariffs, could affect demand for Norfolk Southern's transportation services, impacting future revenue growth and operational planning.

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 freight transportation services. The company charges customers for moving goods via its rail network, with revenue streams categorized into several segments: intermodal, coal, automotive, and merchandise. The intermodal segment, which involves transporting containers and trailers, is a significant source of revenue due to the growing demand for efficient logistics solutions. The coal segment has historically been a major contributor, particularly in regions rich in natural resources. Additionally, Norfolk Southern partners with various companies across industries to optimize supply chain logistics, enhancing its service offerings and customer base. Factors influencing its earnings include rail traffic volume, freight rates, operational efficiency, and the overall health of the economy, which affects demand for transportation services.

Norfolk 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.

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.

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.

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.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	12.18B	12.12B	12.16B	12.74B	11.14B	9.79B
Gross Profit	4.39B	3.76B	2.81B	4.73B	4.37B	3.40B
EBITDA	6.51B	5.49B	4.34B	6.04B	5.71B	4.31B
Net Income	3.35B	2.62B	1.83B	3.27B	3.00B	2.01B
Balance Sheet
Total Assets	44.16B	43.68B	41.65B	38.88B	38.49B	37.96B
Cash, Cash Equivalents and Short-Term Investments	1.30B	1.64B	1.57B	456.00M	839.00M	1.11B
Total Debt	17.37B	17.48B	17.57B	15.59B	14.25B	13.11B
Total Liabilities	29.37B	29.38B	28.87B	26.15B	24.85B	23.17B
Stockholders Equity	14.79B	14.31B	12.78B	12.73B	13.64B	14.79B
Cash Flow
Free Cash Flow	2.02B	1.67B	830.00M	2.27B	2.79B	2.14B
Operating Cash Flow	4.20B	4.05B	3.18B	4.22B	4.25B	3.64B
Investing Cash Flow	-1.65B	-2.78B	-2.18B	-1.60B	-1.22B	-1.18B
Financing Cash Flow	-1.91B	-1.20B	115.00M	-3.00B	-3.31B	-1.93B

Norfolk Southern Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 272.36
• 50DMA: Negative
• 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 Neutral. The current price of 272.36 is below the 20-day moving average (MA) of 279.22, below the 50-day MA of 274.70, and above the 200-day MA of 248.28, indicating a neutral trend. The MACD of -0.15 indicates Positive momentum. The RSI at 42.13 is Neutral, neither overbought nor oversold. The STOCH value of 29.73 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for NSC.

Norfolk Southern Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NSC	79 Outperform	$61.11B	18.40	24.11%	1.98%	0.71%	86.84%
UNP	76 Outperform	$127.62B	18.69	42.35%	2.51%	1.06%	8.13%
Sector *	63 Neutral	$10.70B	15.26	7.37%	2.02%	2.87%	-14.59%
CNI	―	$57.68B	17.77	21.83%	2.71%	―	―
FDX	73 Outperform	$53.24B	13.42	14.68%	2.51%	0.27%	-2.64%
CSX	66 Neutral	$59.75B	19.69	24.83%	1.59%	-3.27%	-10.73%
JBHT	64 Neutral	$13.26B	24.89	14.33%	1.28%	-2.24%	-5.43%

Norfolk Southern Corporate Events

Norfolk Southern Announces Merger with Union Pacific

On July 28, 2025, Norfolk Southern Corporation entered into a merger agreement with Union Pacific Corporation, which will see Union Pacific acquire Norfolk Southern in a stock-and-cash transaction. The merger will result in Norfolk Southern becoming a wholly owned subsidiary of Union Pacific, with certain governance changes including the appointment of Norfolk Southern directors to Union Pacific’s board. The merger is subject to customary conditions, including shareholder and regulatory approvals, and includes provisions for termination fees in specific circumstances.

Norfolk Southern Reports Q2 Results, Announces Major Merger

On July 29, 2025, Norfolk Southern Corporation reported its second-quarter financial results, showing a 4% increase in net income and a 5% rise in earnings per share. The company achieved $3.1 billion in revenue and $1.2 billion in income from railway operations, with an operating ratio of 62.2%. Adjusted figures, excluding restructuring costs and the Eastern Ohio incident, showed a 7% improvement in income from railway operations and an 8% increase in earnings per share. Norfolk Southern also announced a merger with Union Pacific to create the first transcontinental railroad in the U.S., valued at $85 billion. This merger is expected to significantly impact the company’s market position and operations.

Norfolk Southern and Union Pacific Announce Major Merger

On July 29, 2025, Norfolk Southern and Union Pacific announced a merger agreement to create America’s first transcontinental railroad, valued at over $250 billion. This merger is expected to transform the U.S. supply chain, enhance freight competition, and provide significant economic benefits, including job preservation and growth opportunities for employees.

Norfolk Southern in Advanced Merger Talks with Union Pacific

On July 24, 2025, Norfolk Southern Corporation and Union Pacific Corporation announced they are in advanced discussions about a potential merger. While no agreement has been reached yet, the discussions could significantly impact the freight transportation industry, potentially enhancing operational efficiencies and expanding market reach for both companies.

Norfolk Southern Appoints Richard Anderson as New Chair

On June 12, 2025, Norfolk Southern Corporation announced the election of Richard H. Anderson as the new Chair of the Board, following the resignation of Claude Mongeau on June 2, 2025. Anderson, with a background as CEO of Delta Air Lines and Amtrak, has been on the board since May 2024 and will also chair the Executive and Strategy & Planning Committees. The board size was reduced to 12 members, and Jack Huffard was appointed as chair of the Compensation and Talent Management Committee. This leadership change is expected to continue driving Norfolk Southern’s strategic priorities and enhance value for shareholders, customers, and employees.

Norfolk Southern Board Chair Claude Mongeau Resigns

On June 2, 2025, Claude Mongeau resigned as Chair of Norfolk Southern‘s Board of Directors for personal reasons. Mongeau, who has been with the board since September 2019 and served as chair since May 2024, was praised for his leadership during challenging times and for strengthening the company. The board plans to appoint a new chair at its next meeting later in June 2025.