Norfolk Southern's Operational Turnaround To Drive Over 20% EPS Growth Through 2027, Analyst Says
Written by Emily J. Thompson, Senior Investment Analyst
Updated: May 23 2024
0mins
Should l Buy NSC?
Source: Business Insider
- Analyst Upgrade: RBC Capital Markets analyst upgraded Norfolk Southern Corporation to Outperform from Sector Perform with a price target of $270.
- Bullish Stance: The upgrade is based on expected significant improvement in operating ratio and subsequent meaningful EPS growth.
- Investment Opportunity: Analyst sees the company as an attractive investment opportunity due to operational turnaround and outperforming EPS growth.
- Financial Projections: Spracklin estimates EPS CAGR of +20% 2024-27 and a 12.6ppt improvement in operating ratio by 2027.
- First Quarter Performance: Norfolk Southern reported a 4% Y/Y decline in first-quarter railway operating revenue, missing consensus estimates.
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Analyst Views on NSC
Wall Street analysts forecast NSC stock price to fall
13 Analyst Rating
5 Buy
8 Hold
0 Sell
Moderate Buy
Current: 317.290
Low
297.00
Averages
316.56
High
340.00
Current: 317.290
Low
297.00
Averages
316.56
High
340.00
About NSC
Norfolk Southern Corporation is a holding company engaged in the rail transportation business. The Company is engaged in the rail transportation of raw materials, intermediate products, and finished goods in the Southeast, East, and Midwest and, via interchange with rail carriers, to and from the rest of the United States. It also transports overseas freight through several Atlantic and Gulf Coast ports. It offers an intermodal network in the eastern half of the United States. Its railroad operations system reaches various manufacturing plants, electric generating facilities, mines, distribution centers and transload facilities. It serves various industries such as agriculture, forest and consumer products, automotive, chemicals, and metals and construction. Its coal franchise supports the electric generation market, directly serving over 18 coal-fired power plants, as well as the export, domestic metallurgical, and industrial markets, through direct rail and river, lake, and coastal.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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Activist Investor Involvement: An activist investor known for advocating sales of companies like Norfolk Southern and Sealed Air is now entering the Warner Bros. Discovery takeover discussions.
Focus on Takeover Battle: The investor's involvement indicates a strategic push in the ongoing takeover battle surrounding Warner Bros. Discovery.
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Company Update: Norfolk Southern Corporation has made a decision to cut its buyback program.
Target Price Adjustment: The target price for the company's stock has been raised to $342 from a previous $320.
See More
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Norfolk Southern Drives 60 Projects for Economic Growth
- Economic Growth Initiatives: In 2025, Norfolk Southern Corporation advanced over 60 industrial development projects, representing $7.7 billion in investments that significantly boosted local economies and job growth.
- Rail Facility Expansion: These projects primarily focus on new or expanded rail-served facilities, indicating strategic decisions aimed at enhancing transportation capacity and service quality, thereby solidifying the company's market position.
- Strategic Network Advantage: The extensive reach of Norfolk Southern's strategic network enabled this economic activity, enhancing the company's influence across states and industries while promoting diversified regional economic development.
- Customer Investment Confidence: The trust and investment willingness from customers reflect Norfolk Southern's leadership in the industry, with future prospects for attracting more investments to support ongoing economic growth.
See More
Norfolk Southern Drives Economic Growth with $7.7 Billion in Projects
- Investment Scale: In 2025, Norfolk Southern's customers advanced over 60 industrial development projects with a total investment of $7.7 billion, which not only spurred local economic growth but also strengthened the company's market position in rail services.
- Manufacturing Signals: Despite the U.S. Manufacturing PMI contracting for much of 2025, Norfolk Southern's pipeline continues to attract long-term private investments, highlighting its strategic importance in growth corridors across the Southeast and Midwest.
- Land Sales Strategy: In 2025, Norfolk Southern implemented a disciplined real estate strategy that linked land sales to integrated freight opportunities, enhancing network capacity and attracting rail-served industries, showcasing its forward-looking approach to future economic development.
- Merger Proposal Impact: Norfolk Southern's merger proposal with Union Pacific aims to create a unified coast-to-coast freight rail network, expected to accelerate U.S. reindustrialization and provide manufacturers with faster shipping options, further solidifying the economic foundation.
See More
Norfolk Southern Corporation Q4 2025 Earnings Call Insights
- Safety and Efficiency Gains: Norfolk Southern reported zero mainline derailments in Q4 2025, demonstrating strong safety management under merger pressures while steadily improving operational efficiency and customer experience.
- Solid Financial Performance: Despite a 4% decline in overall freight volume, the company achieved an EPS of $3.22 and an operating ratio of 65.3% in Q4, reflecting effective execution in cost control and revenue management.
- Cost Control Commitment: Management raised the 2026 cost takeout target from $100 million to $150 million, with capital spending projected to decrease by $300 million to $1.9 billion, indicating a cautious strategy in an uncertain economic environment.
- Cautious Market Outlook: Management expressed a cautious outlook for future markets, anticipating a 1% revenue headwind due to intensified competition and economic pressures, while the outlook for vehicle production and intermodal transport remains complex.
See More
Warner Bros. Hires Activist, Report Indicates: Implications for the Netflix Acquisition Struggle.
Activist Investor Involvement: An activist investor known for advocating sales of companies like Norfolk Southern and Sealed Air is now entering the Warner Bros. Discovery takeover discussions.
Focus on Takeover Battle: The investor's involvement indicates a strategic push in the ongoing takeover battle surrounding Warner Bros. Discovery.
See More
UBS Downgrades Norfolk Southern Corp to Neutral from Buy; Increases Target Price to $342 from $320
Company Update: Norfolk Southern Corporation has made a decision to cut its buyback program.
Target Price Adjustment: The target price for the company's stock has been raised to $342 from a previous $320.
See More
Wall Street's Latest Rating Changes Overview
- Amazon Downgrade: DA Davidson downgraded Amazon from Buy to Neutral, citing concerns that Amazon Web Services (AWS) is losing market share amid competition from Microsoft and Google, indicating a potential need for increased investment to regain its leading position in the cloud computing sector.
- Merit Medical Initiation: BTIG initiated coverage on Merit Medical with a Buy rating, highlighting its comprehensive product portfolio used across various interventional procedures, which underscores the company's high-quality positioning and growth potential in the medical device market.
- JBS Buy Rating: UBS initiated coverage on Brazilian meat company JBS with a Buy rating and a price target of $19.5 per share, implying a 23% upside, reflecting market confidence in its re-rating and potential stock price appreciation.
- Vistra Upgrade: Goldman Sachs upgraded Vistra from Neutral to Buy, projecting a potential EBITDA increase of 3-9% by 2028, indicating investor optimism regarding its future profitability and growth prospects in the nuclear energy sector.
See More
Norfolk Southern Drives 60 Projects for Economic Growth
- Economic Growth Initiatives: In 2025, Norfolk Southern Corporation advanced over 60 industrial development projects, representing $7.7 billion in investments that significantly boosted local economies and job growth.
- Rail Facility Expansion: These projects primarily focus on new or expanded rail-served facilities, indicating strategic decisions aimed at enhancing transportation capacity and service quality, thereby solidifying the company's market position.
- Strategic Network Advantage: The extensive reach of Norfolk Southern's strategic network enabled this economic activity, enhancing the company's influence across states and industries while promoting diversified regional economic development.
- Customer Investment Confidence: The trust and investment willingness from customers reflect Norfolk Southern's leadership in the industry, with future prospects for attracting more investments to support ongoing economic growth.
See More
Norfolk Southern Drives Economic Growth with $7.7 Billion in Projects
- Investment Scale: In 2025, Norfolk Southern's customers advanced over 60 industrial development projects with a total investment of $7.7 billion, which not only spurred local economic growth but also strengthened the company's market position in rail services.
- Manufacturing Signals: Despite the U.S. Manufacturing PMI contracting for much of 2025, Norfolk Southern's pipeline continues to attract long-term private investments, highlighting its strategic importance in growth corridors across the Southeast and Midwest.
- Land Sales Strategy: In 2025, Norfolk Southern implemented a disciplined real estate strategy that linked land sales to integrated freight opportunities, enhancing network capacity and attracting rail-served industries, showcasing its forward-looking approach to future economic development.
- Merger Proposal Impact: Norfolk Southern's merger proposal with Union Pacific aims to create a unified coast-to-coast freight rail network, expected to accelerate U.S. reindustrialization and provide manufacturers with faster shipping options, further solidifying the economic foundation.
See More
Norfolk Southern Corporation Q4 2025 Earnings Call Insights
- Safety and Efficiency Gains: Norfolk Southern reported zero mainline derailments in Q4 2025, demonstrating strong safety management under merger pressures while steadily improving operational efficiency and customer experience.
- Solid Financial Performance: Despite a 4% decline in overall freight volume, the company achieved an EPS of $3.22 and an operating ratio of 65.3% in Q4, reflecting effective execution in cost control and revenue management.
- Cost Control Commitment: Management raised the 2026 cost takeout target from $100 million to $150 million, with capital spending projected to decrease by $300 million to $1.9 billion, indicating a cautious strategy in an uncertain economic environment.
- Cautious Market Outlook: Management expressed a cautious outlook for future markets, anticipating a 1% revenue headwind due to intensified competition and economic pressures, while the outlook for vehicle production and intermodal transport remains complex.
See More
