Norfolk Southern Corp
Exchange: NYSESector: IndustrialsIndustry: Railroads
Since 1827, Norfolk Southern Corporation and its predecessor companies have safely moved the goods and materials that drive the U.S. economy. Today, it operates a 22-state freight transportation network. Committed to furthering sustainability, Norfolk Southern helps its customers avoid approximately 15 million tons of yearly carbon emissions by shipping via rail. Its dedicated team members deliver approximately 7 million carloads annually, from agriculture to consumer goods. Norfolk Southern also has the most extensive intermodal network in the eastern U.S. It serves a majority of the country's population and manufacturing base, with connections to every major container port on the Atlantic coast as well as major ports across the Gulf Coast and Great Lakes.
Current Price
$311.84
-2.00%GoodMoat Value
$234.96
24.7% overvaluedProfile
Valuation (TTM)
Market Cap$70.03B
P/E26.23
EV$79.50B
P/B4.50
Shares Out224.57M
P/Sales5.75
Revenue$12.19B
EV/EBITDA15.34
Norfolk Southern Corp (NSC) Stock Analysis
GoodMoat Analysis
Norfolk Southern operates a critical railroad network in the eastern US, possessing a durable moat based on scale and regulatory barriers. However, the stock's current price is above the GoodMoat target, indicating an unfavourable valuation, and the business shows mixed quality signals that warrant caution.
Read full analysis
Norfolk Southern Corp (NSC) is a major Class I railroad company operating a 19,500-mile freight rail network in the eastern United States. Its core business involves transporting industrial, agricultural, and consumer goods, providing a mission-critical infrastructure service. Applying the GoodMoat framework, the company exhibits a strong competitive moat, likely scoring highly on criteria such as Scale Privilege (its vast, irreplicable network), Regulatory Barriers (a natural duopoly in its regions), and Switching Costs (the prohibitive expense for customers to use alternatives). This suggests a durable, long-term advantage.
Despite the strong moat, the company's current quality indicators are mixed. While it shows strong profitability metrics like an 18.5% ROE and a 35.8% operating margin, it faces headwinds with a -1.7% YoY revenue decline. The valuation assessment is a key concern. With a current price of $282.95, it trades significantly above the GoodMoat target of $234.96, implying a negative margin of safety. A P/E of 22x, combined with the revenue decline, suggests the price may not offer a sufficient discount to intrinsic value.
Following the Decision Framework, the business likely passes the Moat & Quality Gate due to its durable advantages. However, it fails the Valuation & Risk Gate, as the price indicates an unfavourable margin of safety. For a value investor, this points to a company with a strong underlying business but a stock price that appears to require perfect execution to justify, making it an investment case to approach with caution at these levels.
Analysis based on data as of 2024-05-15.
Market Cap$70.03B
Current Price$311.84
P/E Ratio26.23
Forward P/E—
PEG Ratio-0.99
EPS$12.75
Book Value$69.23
P/B Ratio4.50
NSC Financial Charts
FCF vs CAPEX
FCFCAPEX
Forward estimates use 0.5% FCF growth (CAGR)
Cash vs Debt
Net Debt: 15.6B
Revenue
11.3B
FY19
9.8B
FY20
11.1B
FY21
12.7B
FY22
12.2B
FY23
12.1B
FY24
12.2B
FY25
Net Income
2.7B
FY19
2.0B
FY20
3.0B
FY21
3.3B
FY22
1.8B
FY23
2.6B
FY24
2.9B
FY25
NSC 52-Week Range
$235.07
$320.08
50-Day MA: $299.73200-Day MA: $290.90
Did you know?
Earnings per share grew at a 0.9% CAGR.
Norfolk Southern Corp (NSC) Financial Summary
Norfolk Southern Corp (NSC) is a Industrials company in the Railroads industry, listed on NYSE. The stock currently trades at $311.84 with a market capitalization of $70.03B.
Key valuation metrics include a P/E ratio of 26.23, price-to-book ratio of 4.50, and EPS of $12.75. The company reports a profit margin of 21.9% and return on equity of 17.2%.
NSC Key Financial Metrics
| Metric | Value |
|---|---|
| Market Cap | $70.03B |
| P/E Ratio | 26.23 |
| EPS | $12.75 |
| P/B Ratio | 4.50 |
| P/S Ratio | 5.75 |
| EV/EBITDA | 15.34 |
| Dividend Yield | 1.73% |
| Profit Margin | 21.9% |
| Return on Equity | 17.2% |
| Debt/Equity | 1.10 |
NSC Revenue & Earnings History
| Year | Revenue | Net Income |
|---|---|---|
| FY19 | $11.30B | $2.72B |
| FY20 | $9.79B | $2.01B |
| FY21 | $11.14B | $3.00B |
| FY22 | $12.74B | $3.27B |
| FY23 | $12.16B | $1.83B |
| FY24 | $12.12B | $2.62B |
| FY25 | $12.18B | $2.87B |
Norfolk Southern Corp (NSC) Valuation
Based on GoodMoat's DCF model, Norfolk Southern Corp has a fair value estimate of $234.96. At the current price of $311.84, the stock appears 32.7% overvalued relative to our intrinsic value estimate.
NSC Quality Indicators
Norfolk Southern Corp maintains a profit margin of 21.9% and an operating margin of 35.8%. Return on equity stands at 17.2%. The current ratio is 0.85. Debt-to-equity ratio is 1.10.
About Norfolk Southern Corp
Since 1827, Norfolk Southern Corporation and its predecessor companies have safely moved the goods and materials that drive the U.S. economy. Today, it operates a 22-state freight transportation network. Committed to furthering sustainability, Norfolk Southern helps its customers avoid approximately 15 million tons of yearly carbon emissions by shipping via rail. Its dedicated team members deliver approximately 7 million carloads annually, from agriculture to consumer goods. Norfolk Southern also has the most extensive intermodal network in the eastern U.S. It serves a majority of the country's population and manufacturing base, with connections to every major container port on the Atlantic coast as well as major ports across the Gulf Coast and Great Lakes.
NSC Free Cash Flow
Norfolk Southern Corp generated $2.32B in trailing twelve-month free cash flow, representing an FCF yield of 3.31%. This moderate FCF yield indicates reasonable cash generation.
NSC Shares Outstanding
Norfolk Southern Corp has 0.22 billion shares outstanding at a share price of $311.84, giving it a market capitalization of $70.03B.