Last Updated: 09 Nov 2024
Executive Summary
Norfolk Southern Corporation (NSC) is a leading Class I freight railroad in the United States, operating a vast network of 19,420 route miles. The company's strong financial performance, including an EBITDA of $5.888 billion and a diluted EPS of $10.7, has contributed to a market capitalization of $61.46 billion. NSC's current stock price of $271.67 is within the range of its 52-week high and low.
Company Overview
Norfolk Southern is headquartered in Atlanta, Georgia, and operates in 22 eastern states and the District of Columbia. The company's rail network connects major industrial and population centers, enabling it to transport a diverse range of commodities, including coal, intermodal, and automotive products. Norfolk Southern also has rights over the Albany to Montreal route of the Canadian Pacific Railway.
Fundamental Analysis
Revenue and Earnings: NSC's revenue for the trailing twelve months (TTM) is $12.172 billion, with a gross profit of $6.156 billion. The company's diluted EPS for the TTM is $10.7, resulting in a trailing PE ratio of 25.39.
Profitability: Norfolk Southern's profit margin is 0.199, indicating a healthy level of profitability. The company's operating margin TTM is 0.499, demonstrating its ability to generate profits from its operations.
Return on Assets and Equity: NSC's return on assets TTM is 0.0677, and its return on equity TTM is 0.183, indicating that the company is effectively utilizing its assets and equity to generate returns for shareholders.
Dividend: Norfolk Southern pays a quarterly dividend of $5.4 per share, resulting in a dividend yield of 0.0199. The company's next dividend payment is scheduled for November 20, 2024.
Technical Analysis
Moving Averages: The 50-day moving average is $251.38, and the 200-day moving average is $241.98. The stock price is currently trading above both moving averages, indicating a bullish trend.
Support and Resistance: The stock has immediate support at $260 and resistance at $280. A break above $280 could lead to further upside potential.
Momentum Indicators: The relative strength index (RSI) is at 65, indicating that the stock is overbought. The moving average convergence divergence (MACD) is above the signal line, suggesting a bullish trend.
Short Term Outlook
Technically, Norfolk Southern is in a bullish trend, with the stock price trading above both moving averages. The overbought RSI suggests that a pullback may be possible in the short term. However, the bullish MACD and the presence of support at $260 indicate that the stock has the potential to continue its upward momentum.
Long Term Outlook
Norfolk Southern's strong financial performance, coupled with its strategic network and focus on operational efficiency, positions the company well for long-term growth. The company's commitment to capital investment and its efforts to improve customer service are expected to drive revenue and earnings in the future.
Analyst Recommendations
Analysts are generally bullish on Norfolk Southern, with 4 strong buy ratings, 10 buy ratings, 12 hold ratings, 1 sell rating, and 0 strong sell ratings. The average analyst target price is $275.59, suggesting a potential upside of approximately 1.4% from the current price.
