Atlanta, Georgia-headquartered Norfolk Southern Corporation (NSC) is a prominent rail transportation service provider. Valued at $53.4 billion by market cap, Norfolk specializes in the transportation of raw materials, intermediate goods, and finished products, serving key players across the agricultural, consumer, and industrial sectors. In addition to its domestic operations, it also facilitates overseas freight transportation through a network of Atlantic and Gulf Coast ports.
The railroads giant is set to announce its Q4 earnings before the market opens on Wednesday, Jan. 29. Ahead of the event, analysts expect Norfolk to report a non-GAAP profit of $2.97 per share, up nearly 5% from $2.83 per share reported in the year-ago quarter. The company has surpassed Wall Street’s earnings estimates twice over the past four quarters while missing on two other occasions. Its adjusted EPS for the last reported quarter surged 22.6% year-over-year to $3.25, exceeding analysts’ estimates by 4.8%.
For fiscal 2024, Norfolk is expected to report an adjusted EPS of $11.79, up marginally from $11.74 in fiscal 2023. While in fiscal 2025, its earnings are expected to surge 13.2% year-over-year to $13.34.
NSC stock has gained 1.3% over the past 52 weeks, significantly underperforming the S&P 500 Index’s ($SPX) 26.3% surge and the Industrial Select Sector SPDR Fund’s (XLI) 19.4% returns during the same time frame.
Norfolk Southern’s stock prices soared over 4.9% after the release of its impressive Q3 earnings on Oct. 22. The company reported a notable 2.7% year-over-year growth in operating revenues to over $3 billion. Norfolk Southern drove productivity and increased volumes while demonstrating resilience in dealing with weather challenges. The company delivered sequential and year-over-year margin improvement, which positions it to achieve its adjusted operating ratio targets for the second half and full year 2024. Meanwhile, Norfolk’s significant expense management efforts led to a 111.1% surge in income from operations to $1.5 billion.
During the first three quarters of the year, Norfolk had a negative working capital of $987 million, which led to a 23.7% year-over-year increase in cash flow from operations to $3.1 billion, enabling it to increase spending on investing activities.
The consensus opinion on NSC stock is moderately bullish, with an overall “Moderate Buy” rating. Out of the 25 analysts covering the stock, 14 recommend “Strong Buy,” one suggests “Moderate Buy,” nine advise “Hold,” and one advocates a “Strong Sell” rating. Its mean price target of $278.30 represents an 18% premium to current price levels.
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