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Norfolk Southern Corporation (NSC), founded in 1980 and headquartered in Atlanta, Georgia, is a major player in U.S. rail transportation. Operating over 19,500 route miles across 22 states and D.C., connecting 800 industrial sites, 175 warehouses, and 43 ports, Norfolk Southern hauls everything from soybeans and wheat to steel, chemicals, and finished automobiles. It also runs an extensive intermodal network, connecting ports on the Atlantic and Gulf Coasts. With a market cap of $50.1 billion, the company is a powerhouse in moving raw materials, intermediate products, and finished goods across the country.
Companies worth $10 billion or more are generally described as "large-cap stocks," and Norfolk fits right into that category with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the rail transportation industry.
Despite its strengths, Norfolk has slipped 14.9% from its 52-week high of $263.66, achieved on March 13. NSC stock has declined 14.1% over the past three months, significantly trailing behind the Dow Jones Industrials Average ($DOWI), which is down 1% over the same time frame.
Moreover, in the longer term, Norfolk’s stock has declined 5% on a YTD basis and gained about 1.9% over the past 52 weeks, lagging behind DOWI’s 3.8% gains in 2024 and 14.9% returns over the past 52 weeks.
To confirm the bearish trend, NSC has traded below the 50-day moving average since late March and its 200-day moving average since mid-May.
Norfolk Southern has hit some bumps in 2024, souring investor sentiment and underperforming compared to the Dow Jones. The big blow was a $600 million settlement for a class action lawsuit from last year's disastrous East Palestine, Ohio derailment. Despite trying to win back shareholders with buybacks and dividends, a glitch in 2023 operations also spooked investors.
Things didn't get better when Norfolk Southern's Q1 earnings results on April 24 were a letdown, causing the stock to dip 3.6%. The adjusted EPS of $2.49 missed estimates by 3.5%, and the $3 billion revenue fell short, declining 4% year over year, with key segments like Merchandise, Intermodal, and Coal all taking a hit.
Meanwhile, Norfolk Southern’s rival Union Pacific Corporation (UNP) outshined NSC, gaining 11.8% over the past 52 weeks. Yet, UNP stock’s 8.3% dip on a YTD basis seems steeper than NSC’s mid-single-digit drop over the same time frame.
Still, there is a silver lining. Analysts are moderately bullish about NSC’s prospects. The stock has a consensus “Moderate Buy” rating from the 22 analysts covering the stock. The mean target of $261.76 suggests a potential upside of 16.6% from the current price levels.
On the date of publication, Sristi Jayaswal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
