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Atlanta, Georgia-based Norfolk Southern Corporation (NSC) provides rail transportation services. Valued at $56 billion by market cap, the company transports raw materials, intermediate products, and finished goods via interchange with rail carriers. NSC also transports overseas freight through several Atlantic and Gulf Coast ports. The leader in the transportation industry is expected to announce its fiscal third-quarter earnings for 2024 before the market opens on Tuesday, Oct. 22.
Ahead of the event, analysts expect NSC to report a profit of $3.11 per share on a diluted basis, up 17.4% from $2.65 per share in the year-ago quarter. The company missed the consensus estimates in three of the last four quarters while beating on another occasion.
For the full year, analysts expect NSC to report EPS of $11.79, up marginally from $11.74 in fiscal 2023. Its EPS is expected to rise 15% year over year to $13.56 in fiscal 2025.
NSC stock has underperformed the S&P 500’s ($SPX) 32.2% gains over the past 52 weeks, with shares up 27.3% during this period. Similarly, it underperformed the Industrial Select Sector SPDR Fund’s (XLI) 34.1% gains over the same time frame.
NSC’s underperformance is due to a large-scale strike by dockworkers on the U.S. East and Gulf Coasts, impacting ports and disrupting shipments. The strike is expected to cost the economy $5 billion a day, potentially leading to job losses and inflation. NSC, as an East Coast railroad, could see a decrease in volumes as goods stop moving into the affected ports. Additionally, the Environmental Protection Agency's reporting of test results following a chemical spill from a Norfolk Southern train derailment has caused uncertainty among residents about contamination and health risks.
On Jul. 25, NSC shares closed up marginally after reporting its Q2 results. Its adjusted EPS of $3.06 exceeded Wall Street expectations of $2.85. The company’s revenue was $3.04 billion, exceeding Wall Street forecasts of $3.02 billion.
Analysts’ consensus opinion on NSC stock is reasonably bullish, with a “Moderate Buy” rating overall. Out of 24 analysts covering the stock, 13 advise a “Strong Buy” rating, one suggests a “Moderate Buy” rating, nine give a “Hold” rating, and one recommends a “Strong Sell.” NSC’s average analyst price target is $267.14, indicating a potential upside of 9.6% from the current levels.
On the date of publication, Neha Panjwani 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.
