Norfolk Southern (NSC) AI Stock Analysis

• Market Cap: $71.32B
• Dividend Yield: 1.85%
• Average Volume (3M): 882.36K
• Price to Earnings (P/E): 22.9
• Beta (1Y): 0.75
• Revenue Growth: 0.48%
• EPS Growth: 22.88%
• Country: US
• Employees: 19,600
• Sector: Industrials
• Sector Strength: 72
• Industry: Railroads
• EPS (TTM): 3.22
• Shares Outstanding: 244,708,450
• 10 Day Avg. Volume: 1,184,120
• 30 Day Avg. Volume: 882,364
• PEG Ratio: 2.24
• Price to Book (P/B): 4.17
• Price to Sales (P/S): 5.33
• P/FCF Ratio: 14.88
• Enterprise Value/Market Cap: 1.16
• Enterprise Value/Revenue: 6.77
• Enterprise Value/Gross Profit: 15.96
• Enterprise Value/Ebitda: 14.10
• 1Y Price Target: $306.27
• Price Target Upside: 2.66% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 12
• EPS Forecast (FY): 12.23
• Revenue Forecast (FY): $12.48B

• Rating: 68 Neutral
• Price Target: $316.00 ▲(5.93% Upside)

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.

Productivity and safety gains

Structural productivity improvements (more GTMs with fewer employees) and materially better safety metrics cut unit costs and operational risk. These gains are lasting efficiency levers that support margins, lower per-unit operating costs and improve resilience through demand cycles.

Consistently strong margins

Persistently healthy operating and net margins reflect strong network economics and pricing for core franchises. Durable margin strength supports return on equity and provides room to absorb demand volatility, sustaining cash returns and investment capacity over the medium term.

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.

Intermodal and coal headwinds

Structural pressure in intermodal (share losses, warehousing/transport dynamics) and seaborne coal pricing reduce key revenue streams. Persistent weakness in these categories limits top-line recovery, hinders network density, and raises risk to long-term revenue diversification and pricing power.

Merger and regulatory uncertainty

Regulatory setbacks and legal challenges create prolonged strategic uncertainty for the proposed Union Pacific merger. Delays, incremental compliance/legal costs and competitor reactions can erode expected synergies, distract management, and prolong execution risk over multiple quarters.

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

Strong profitability and improving cash conversion (operating cash flow consistently above net income; free cash flow improved sharply in 2024–2025). Offsets include uneven/weak recent revenue trajectory (including a meaningful 2025 revenue drop) and a meaningfully levered balance sheet for a capital-intensive railroad (debt-to-equity ~1.1 in 2025).

Income Statement

Profitability remains a clear strength, with consistently strong operating and net margins across the period (net margin generally in the mid-teens to high-20s, and 2025 showing a return to very strong profitability). However, growth has been weak: revenue was essentially flat in 2023–2025 and down meaningfully in 2025 versus the prior year, following a stronger 2021–2022. Overall, strong margins and earnings power are offset by an uneven recent revenue trajectory.

Balance Sheet

The balance sheet looks serviceable but levered. Debt-to-equity sits around ~1.0–1.4 historically (about ~1.1 in 2025), which is meaningful leverage for a cyclical, capital-intensive railroad. Offsetting that, returns on equity are solid (generally mid-teens to mid-20s), and equity has improved versus 2022–2023 levels. Key watch item remains leverage staying elevated while growth is muted.

Cash Flow

Cash generation is a strong point: operating cash flow consistently exceeds net income (coverage above 1.0 each year), indicating good earnings quality. Free cash flow improved sharply in 2024–2025, with 2025 free cash flow matching net income (a notable step up versus 2023–2024 when free cash flow covered only a portion of earnings). The main weakness is volatility in free cash flow over the period, but the most recent trend is favorable.

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	4.36B	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

• Technical Analysis Sentiment: Positive
• Last Price: 298.32
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: 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 298.32 is above the 20-day moving average (MA) of 288.79, above the 50-day MA of 290.28, and above the 200-day MA of 271.75, indicating a bullish trend. The MACD of 0.73 indicates Negative momentum. The RSI at 61.46 is Neutral, neither overbought nor oversold. The STOCH value of 88.36 is Negative, 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	76 Outperform	$78.84B	18.50	15.87%	1.94%	3.09%	14.94%
JBHT	69 Neutral	$20.16B	34.57	15.79%	0.89%	-1.60%	4.87%
NSC	68 Neutral	$71.32B	22.86	19.23%	1.85%	0.48%	22.88%
UNP	68 Neutral	$139.53B	19.64	40.38%	2.32%	1.06%	8.21%
CSX	67 Neutral	$71.49B	24.89	22.52%	1.42%	-3.80%	-17.32%
UPS	66 Neutral	$93.55B	16.81	33.83%	6.55%	-1.25%	-2.25%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

Norfolk Southern Corporate Events

Norfolk Southern Reports Mixed Q4, Stronger Full-Year 2025

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. Fourth-quarter 2025 railway operating revenue slipped 2% year-over-year to $3.0 billion on a 4% volume decline, with income from railway operations down 17% to $937 million and the operating ratio deteriorating to 68.5%, though adjusted figures excluding merger-related costs, the Eastern Ohio incident, and prior-year line-sale gains show a milder 3% decline in operating income and a 65.3% operating ratio. Full-year 2025 railway operating revenue edged up to $12.2 billion despite a $134 million headwind from lower fuel surcharge revenue, while income from railway operations rose 7% to $4.4 billion and the operating ratio improved 220 basis points to 64.2%, with adjusted metrics indicating 3% growth in operating income, an 80-basis-point improvement in operating ratio, and a 5% gain in adjusted EPS to $12.49. Management highlighted achieving more than $215 million in productivity savings, record-low injury and accident rates over more than a decade, and a focus on cost control, safety and service reliability, signaling continued emphasis on efficiency and risk management as the company navigates an uncertain demand environment and ongoing financial impacts from the Eastern Ohio incident and merger-related activities.

The most recent analyst rating on (NSC) stock is a Buy with a $322.00 price target. To see the full list of analyst forecasts on Norfolk Southern stock, see the NSC Stock Forecast page.

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.

The most recent analyst rating on (NSC) stock is a Buy with a $322.00 price target. To see the full list of analyst forecasts on Norfolk Southern stock, see the NSC Stock Forecast page.

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.

The most recent analyst rating on (NSC) stock is a Buy with a $333.00 price target. To see the full list of analyst forecasts on Norfolk Southern stock, see the NSC Stock Forecast page.

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.

The most recent analyst rating on (NSC) stock is a Hold with a $307.00 price target. To see the full list of analyst forecasts on Norfolk Southern stock, see the NSC Stock Forecast page.