Susquehanna has revised its price target for Norfolk Southern (NSC, Financial), lowering it to $250 from the previous $260, while maintaining a Neutral rating on the stock. The investment firm indicated that despite potential mid-term risks to Norfolk Southern's revenue projections, investor sentiment seems more balanced compared to the latter half of the previous year.
The challenges currently confronting Norfolk Southern are largely attributed to broader economic conditions rather than issues specific to the company. In contrast to the disruptions experienced in 2023 and 2024, the focus now is on navigating macroeconomic headwinds. The adjustment in the price target reflects these external pressures while acknowledging the managed investor expectations in the present market environment.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 23 analysts, the average target price for Norfolk Southern Corp (NSC, Financial) is $261.15 with a high estimate of $290.00 and a low estimate of $174.00. The average target implies an upside of 17.66% from the current price of $221.95. More detailed estimate data can be found on the Norfolk Southern Corp (NSC) Forecast page.
Based on the consensus recommendation from 28 brokerage firms, Norfolk Southern Corp's (NSC, Financial) average brokerage recommendation is currently 2.3, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Norfolk Southern Corp (NSC, Financial) in one year is $254.29, suggesting a upside of 14.57% from the current price of $221.95. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Norfolk Southern Corp (NSC) Summary page.
NSC Key Business Developments
Release Date: April 23, 2025
- EPS Growth: 8% growth on an adjusted basis.
- Storm Restoration Costs: $35 million incurred due to weather impacts.
- Labor Productivity Savings: $55 million in savings.
- Volume Increase: Overall volume rose 1% year-over-year.
- Total Revenue: Flat, with total revenue less fuel up 2%.
- Merchandise RPU Less Fuel: Increased by 4% year-over-year.
- Intermodal Volume Increase: 3% year-over-year increase.
- Coal RPU Less Fuel: Decreased by 3% due to lower export coal prices.
- Operating Ratio: Adjusted operating ratio was 67.9%, including 120 basis points from storm costs.
- Net Income and EPS Improvement: 8% improvement year-over-year.
- Share Repurchases: Nearly $250 million of shares bought back in the quarter.
- Insurance Recoveries: Net benefit of $185 million from insurance recoveries related to the Eastern Ohio incident.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Norfolk Southern Corp (NSC, Financial) achieved an 8% EPS growth on an adjusted basis despite severe weather disruptions.
- The company demonstrated strong network resiliency, quickly restoring operations after 18 significant storms.
- Labor productivity improvements resulted in $55 million in savings, contributing to financial performance.
- The company achieved a 3% year-over-year volume increase in Intermodal, with gains in both domestic and international segments.
- Norfolk Southern Corp (NSC) maintained a strong focus on safety, achieving a 13% year-over-year reduction in FRA injury ratio and a 43% reduction in train accident frequency.
Negative Points
- Norfolk Southern Corp (NSC) faced $35 million in extraordinary expenses due to storm restoration, impacting the operating ratio.
- Export coal prices were lower, negatively affecting revenue per unit (RPU) less fuel by 3%.
- The company experienced flat total revenue, with fuel surcharge headwinds masking otherwise solid revenue performance.
- There is uncertainty regarding the impact of tariffs on end markets and revenues, which could affect future performance.
- The company is facing challenges in the Metals and Construction segments, with volume declines offsetting gains in other areas.
