NSC
Norfolk Southern Corporation$318.45
Unclear
Target $311.11
Report: Mar 07, 2026Industrials • Railroads • Asset-Based OperatorSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$318.45-2.3%
Rec: UnclearConviction: High
Entry Target
$239.32
(25% below current)
Fair Value
$311.11
(2% below current)
Stop Loss
$48.46
(85% below current)
Position Size
Half
Time Horizon
Strategic (2-3 Years)
Key Metrics
Live Snapshot
Market Data
52 Week High$319.94
52 Week Low$201.63
Avg. 3 Month Volume1.26M
Efficiency
LTM Gross Margin69.9%
LTM EBITDA Margin48.0%
LTM EBIT Margin36.6%
LTM Operating Margin35.8%
LTM ROA6.5%
LTM ROE19.2%
LTM ROIC7.9%
LTM ROCE11.0%
Capital Structure
Market Cap (MM)$64.5B
Enterprise Value (MM)$80.0B
Shares Outstanding224.57M
Total Debt (MM)$17.09B
Cash & Equivalents (MM)$1.53B
LTM Net Debt (MM)$15.56B
LTM Net Debt/EBITDA2.7x
Growth
TTM Rev. Growth0.5%
Last 3-Yr Rev. CAGR-1.5%
Last 3-Yr EBITDA CAGR-1.1%
Last 3-Yr EPS CAGR-2.9%
Valuation
Street Target Price$315.33
LTM EV/Revenue6.6x
LTM EV/Gross Profit9.4x
LTM EV/EBIT18.0x
LTM EV/EBITDA13.7x
LTM P/E22.4x
LTM EV/FCF34.5x
LTM P/FCF27.8x
LTM P/TB1.4x
LTM P/B4.1x
Dividend Yield1.9%
Payout Ratio42.4%
Executive SummarySituation: Current price is $318.45 versus fair value $311.11 (-2.3% expected return), and valuation confidence is stable. Debate: Bull case depends on STB merger approval with Union Pacific, resolving 1% revenue drag and unlocking $2.75B synergies via single-line transcontinental service; validates asset network value (19,100 miles) and addresses market volume fears per transcripts. Bear case centers on Merger denial or prolonged STB review amplifies 1% intermodal headwind into permanent volume loss (6% YoY), eroding RPU/pricing power and FCF below $2B. Conclusion: Recommendation is Unclear; maintain no position until reliability and catalyst evidence improve.
Bull Case
PSR 2.0 drove $216M cost savings expanding margins 220bps to 35.8% with $2.32B FCF (151% conversion); Union Pacific merger unlocks $2.75B synergies and transcontinental network; tangible assets at $36.5B PP&E provide floor with 9.5% TBVPS growth.
Bear Case
1% merger headwind persists with intermodal/coal volumes down 6%/11%; ROIC 5.1% below 10.4% WACC signals value-destructive reinvestment; short interest at 4.6% DTC 7.7 days amid Zacks #4 Sell rating.
Key Catalysts
Mid-Term (6-18 months)Impact: Critical
STB merger approval with Union Pacific, resolving 1% revenue drag and unlocking $2.75B synergies via single-line transcontinental service; v...
Near-Term (0-6 months)Impact: High
Asset monetization via line sales ($400M recent) or sale-leaseback, deleveraging 2.7x net debt/EBITDA and funding buybacks; counters low ROI...
Near-Term (0-6 months)Impact: Moderate
Debt refinancing at <5% rates post-Fed cuts, saving on $17.1B debt (avg 4.5%); enhances FCF yield amid 5.63x coverage.
Primary Risks
Concern: High
Merger denial or prolonged STB review amplifies 1% intermodal headwind into permanent volume loss (6% YoY), eroding RPU/pricing power and FC...
Concern: Medium
Regulatory change post-derailment (e.g. stricter hazmat rules) impairs 19,100-mile asset cash flows via higher CapEx >16% revenue or fines.
Concern: Low
Technological obsolescence of rail assets from autonomous trucking erodes network moat, dropping volumes 10%+ and ROIC further below 5.1%.
Recent Activity
2025-05-10SEC Filing (8-K)
+6.98%Norfolk Southern 2025 Annual Meeting of Shareholders results
2024-07-26SEC Filing (8-K)
+10.91%Norfolk Southern reports Q2 2024 results and reaffirms full-year adjusted operating ratio guidance
2024-02-01SEC Filing (8-K)
+8.50%Ann A. Adams departure and retention agreement announced
2023-10-25SEC Filing (8-K)
-5.33%Norfolk Southern reports Q3 2023 results with impact from Eastern Ohio incident
2023-01-25SEC Filing (8-K)
-5.05%Norfolk Southern reports Q4 and full-year 2022 results with record revenue and operating income
Valuation Table
8.1/10Decision Grade
Scenario Range
$0
Bear
$3
Base
$17
Bull
$318