Now trading at a price of $218.68, Norfolk Southern has moved -2.8% so far today.
Over the last year, Norfolk Southern logged a 1.4% change, with its stock price reaching a high of $263.66 and a low of $183.09. Over the same period, the stock underperformed the S&P 500 index by -24.9%. AThe company's 50-day average price was $230.86. Norfolk Southern Corporation, together with its subsidiaries, engages in the rail transportation of raw materials, intermediate products, and finished goods in the United States. Based in Atlanta, GA, the Large-Cap Industrials company has 20,700 full time employees. Norfolk Southern has offered a 2.4% dividend yield over the last 12 months.
Increasing Revenues but Narrowing Margins:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $11,458 | $11,296 | $9,789 | $11,142 | $12,745 | $12,156 |
| Operating Margins | 35% | 35% | 31% | 40% | 38% | 23% |
| Net Margins | 23% | 24% | 21% | 27% | 26% | 15% |
| Net Income (M) | $2,666 | $2,722 | $2,013 | $3,005 | $3,270 | $1,827 |
| Net Interest Expense (M) | $557 | $604 | $625 | $646 | $692 | $722 |
| Depreciation & Amort. (M) | $1,102 | $1,138 | $1,154 | $1,181 | $1,221 | $1,298 |
| Diluted Shares (M) | 280 | 266 | 257 | 248 | 236 | 227 |
| Earnings Per Share | $9.51 | $10.25 | $7.84 | $12.11 | $13.88 | $8.02 |
| EPS Growth | n/a | 7.78% | -23.51% | 54.46% | 14.62% | -42.22% |
| Avg. Price | $142.33 | $172.39 | $185.27 | $256.24 | $252.5 | $219.21 |
| P/E Ratio | 14.86 | 16.7 | 23.51 | 21.07 | 18.14 | 27.26 |
| Free Cash Flow (M) | $1,775 | $1,873 | $2,143 | $2,785 | $2,274 | $830 |
| CAPEX (M) | $1,951 | $2,019 | $1,494 | $1,470 | $1,948 | $2,349 |
| EV / EBITDA | 10.12 | 11.26 | 14.28 | 13.78 | 12.48 | 15.8 |
| Total Debt (M) | $11,145 | $12,196 | $12,681 | $13,840 | $15,182 | $17,179 |
| Net Debt / EBITDA | 2.13 | 2.27 | 2.78 | 2.31 | 2.44 | 3.76 |
| Current Ratio | 0.72 | 0.9 | 1.07 | 0.86 | 0.76 | 1.24 |
Norfolk Southern has declining EPS growth, positive cash flows, and a highly leveraged balance sheet. On the other hand, the company has slight revenue growth and increasing reinvestment in the business working in its favor. Furthermore, Norfolk Southern has decent operating margins with a negative growth trend and just enough current assets to cover current liabilities, as shown by its current ratio of 1.24.
Norfolk Southern's Valuation Is in Line With Its Sector Averages:
Norfolk Southern has a trailing twelve month P/E ratio of 37.2, compared to an average of 25.4 for the Industrials sector. Based on its EPS guidance of $13.84, the company has a forward P/E ratio of 16.7. The 5.5% compound average growth rate of Norfolk Southern's historical and projected earnings per share yields a PEG ratio of 6.75. This suggests that these shares are overvalued. Furthermore, Norfolk Southern is likely overvalued compared to the book value of its equity, since its P/B ratio of 3.94 is higher than the sector average of 3.23. The company's shares are currently trading 117.1% below their Graham number.
Norfolk Southern Has an Average Rating of Buy:
The 20 analysts following Norfolk Southern have set target prices ranging from $241.0 to $300.0 per share, for an average of $271.34 with a buy rating. The company is trading -19.4% away from its average target price, indicating that there is an analyst consensus of some upside potential.
Norfolk Southern has a very low short interest because 0.8% of the company's shares are sold short. Institutions own 77.9% of the company's shares, and the insider ownership rate stands at 0.06%, suggesting a small amount of insider investors. The largest shareholder is Vanguard Group Inc, whose 9% stake in the company is worth $4,291,308,385.
