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Norfolk Southern Corporation (NSC), headquartered in Atlanta, Georgia, is a prominent transportation service provider specializing in rail-based logistics solutions. With a market cap of $58.1 billion, Norfolk Southern plays a vital role in connecting industries across North America, offering efficient and sustainable freight transportation services.
Companies with a market value of $10 billion or more are classified as “large-cap stocks,” Norfolk Southern is firmly positioned within this category. This classification highlights its significant size, extensive network, and leadership in the transportation and logistics sector. The company’s commitment to reliability and environmental responsibility reinforces its position as a key player in the freight transportation industry.
Norfolk Southern shares are trading 7.8% below their 52-week high of $277.60, which they hit on Nov. 6. The stock has declined marginally over the past three months, significantly underperforming the iShares Transportation Average ETF (IYT), which has gained 8.8% over the same time frame.
Over the longer term, NSC has gained 8.3% on a YTD basis, slightly underperforming IYT's 9.5% rally. However, over the past 52 weeks, NSC outpaced IYT, with a 15.9% rise compared to IYT's 13.2% gain.
NSC has remained above its 50 and 200-day moving averages since July, with a few fluctuations, indicating a bullish trend.
Norfolk Southern has faced recent challenges, including reduced demand for coal transportation, heightened competition from other railroads, and labor negotiation issues, all contributing to lower profitability.
Despite these headwinds, shares rose over 4% on Oct. 22 after the company reported Q3 results. Adjusted EPS of $3.25 represented a 23% year-over-year increase, surpassing the consensus estimate of $3.10. However, revenue increased 3% to $3.05 billion, slightly missing the expected $3.09 billion. The company improved its operating ratio to 63.4%, a 570-basis point improvement compared to the prior year’s adjusted ratio of 69.1%.
Norfolk Southern outperformed its rival Canadian Pacific Kansas City Limited (CP), which has gained only 3.7% over the past 52 weeks and dipped 4.4% on a YTD basis.
Analysts hold a moderately optimistic outlook for NSC despite its recent underperformance relative to the broader sector. The stock has a consensus "Moderate Buy" rating from 25 analysts covering the stock, and a mean price target of $277.96, which indicates a potential upside of 8.5% from its current price.
