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Norfolk Southern Corp NSC

Morningstar Rating
$221.84 −2.29 (1.02%)
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Company Report

Norfolk Southern's Intermodal Volume Improving, but Margin Pressure Lingers

From the start of the rail renaissance in 2004 through 2008, Norfolk Southern posted the highest margins among US Class I railroads. Its operating ratio (expenses/revenue) deteriorated in 2009 during the great recession, and remained stuck between 69% and 73% from 2010 to 2015. This fell short of progress made by Union Pacific and Canadian Pacific, which lack Norfolk's exposure to Appalachian coal. However, by 2017 Norfolk was back on track, improving to an adjusted 60.1% OR in 2021 as it bolstered pricing execution and adopted precision railroading principles, which have yielded more efficient use of locomotive assets and labor. Of note, in late 2019, former Canadian National CEO Claude Mongeau (2010-16) joined Norfolk's board of directors to help bolster PSR efforts.

Price vs Fair Value

NSC is trading at a 23% premium.
Price
$221.84
Fair Value
$567.00
Uncertainty
Medium
1-Star Price
$157.34
5-Star Price
$967.20
Economic Moat
Pkwzy
Capital Allocation
Ttrgchs

Bulls Say, Bears Say

Bulls

Pressure from an activist investor has prompted management to reinvigorate its precision scheduled railroading focus and commit to reducing the profitability gap relative to peers.

Bears

Insurance coverage should mitigate some of the risk, but the 2023 East Palestine derailment could still yield incremental liabilities in terms of fines, and lawsuits.

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News

Trading Information

Previous Close Price
$224.13
Day Range
$220.14223.13
52-Week Range
$183.09263.66
Bid/Ask
$219.19 / $232.44
Market Cap
$50.12 Bil
Volume/Avg
843,317 / 1.3 Mil

Key Statistics

Price/Earnings (Normalized)
20.90
Price/Sales
4.24
Dividend Yield (Trailing)
2.43%
Dividend Yield (Forward)
2.43%
Total Yield
3.34%

Company Profile

Class-I railroad Norfolk Southern operates in the Eastern United States. On more than 20,000 miles of track, the rail hauls shipments of coal, intermodal traffic, and a diverse mix of automobile, agriculture, metal, chemical, and forest products.
Sector
Industrials
Industry
Railroads
Stock Style Box
Mid Core
Total Number of Employees
20,700

Competitors

Valuation

Metric
NSC
CNI
CP
Price/Earnings (Normalized)
20.9022.8427.12
Price/Book Value
4.055.282.28
Price/Sales
4.246.397.08
Price/Cash Flow
21.2515.5521.53
Price/Earnings
NSC
CNI
CP

Financial Strength

Metric
NSC
CNI
CP
Quick Ratio
0.540.320.38
Current Ratio
0.680.600.49
Interest Coverage
3.359.24−2.62
Quick Ratio
NSC
CNI
CP

Profitability

Metric
NSC
CNI
CP
Return on Assets (Normalized)
6.44%10.36%10.38%
Return on Equity (Normalized)
20.65%26.63%19.99%
Return on Invested Capital (Normalized)
11.08%15.69%13.57%
Return on Assets
NSC
CNI
CP
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Railroads Industry Comparables

1-Day Chart
Name
Price
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
Union Pacific Corp
UNP
KkggthscYfpmt$135.5 Bil
Canadian National Railway Co
CNI
YrcylpsqkThww$79.1 Bil
Canadian Pacific Kansas City Ltd
CP
QqpypwgBhfv$71.1 Bil
CSX Corp
CSX
WykfhcvwFmtpb$64.0 Bil
Westinghouse Air Brake Technologies Corp
WAB
Ffwgyv$28.8 Bil
Central Japan Railway Co
CJPRF
Vybmqz$21.7 Bil
Central Japan Railway Co ADR
CJPRY
Yxmdc$21.0 Bil
MTR Corp Ltd ADR
MTCPY
Pjjlg$19.9 Bil
MTR Corp Ltd
MTRJF
Syptldk$19.9 Bil

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