Norfolk Southern Readies for Q4 Earnings Amid Mixed Performance
The Atlanta-based Norfolk Southern Corporation (NSC) is a major player in rail transportation, specializing in moving raw materials and products for various sectors, including agriculture and industry. With a market cap of $53.4 billion, Norfolk also supports international freight through Atlantic and Gulf Coast ports.
Upcoming Earnings Report and Analyst Expectations
On Wednesday, Jan. 29, Norfolk will announce its Q4 earnings before the market opens. Analysts forecast a non-GAAP profit of $2.97 per share, marking a nearly 5% increase from the $2.83 per share reported in the same quarter last year. Over the past four quarters, Norfolk has outperformed Wall Street’s expectations twice, while falling short on two occasions. For the last reported quarter, its adjusted earnings per share (EPS) jumped 22.6% year-over-year to $3.25, beating estimates by 4.8%.
Future Earnings Projections
Looking ahead to fiscal 2024, Norfolk is expected to post an adjusted EPS of $11.79, a slight increase from $11.74 in fiscal 2023. Projections for fiscal 2025 indicate a more substantial rise, with earnings anticipated to grow 13.2% to $13.34.
Stock Performance and Market Comparisons
Over the last 52 weeks, NSC stock has appreciated by 1.3%, significantly lagging behind the S&P 500 Index’s 26.3% increase and the Industrial Select Sector SPDR Fund’s (XLI) 19.4% gains during the same period.
Recent Earnings and Financial Performance
The stock experienced a jump of over 4.9% following the release of its strong Q3 results on Oct. 22. The company reported an operating revenue growth of 2.7% year-over-year, exceeding $3 billion. Norfolk demonstrated its resilience against weather disruptions while improving productivity and sales volume. Effective expense management led to a remarkable 111.1% increase in operating income to $1.5 billion, indicating the company’s potential to meet adjusted operating ratio targets for the second half of 2024.
In the first three quarters of the year, Norfolk reported negative working capital of $987 million. However, it managed to achieve a 23.7% year-over-year rise in cash flow from operations, totaling $3.1 billion. This allowed for increased investment spending.
Analyst Insights on NSC Stock
The general outlook for NSC stock remains moderately positive, with an average “Moderate Buy” rating from analysts. Among the 25 analysts tracking the stock, 14 recommend a “Strong Buy,” one a “Moderate Buy,” nine suggest “Hold,” and one advises a “Strong Sell.” The average price target of $278.30 suggests an 18% upside based on the current price.
On the date of publication, Aditya Sarawgi did not hold (either directly or indirectly) any positions in the securities mentioned. All information in this article is for informational purposes only. For further details, please view the Barchart Disclosure Policy here. More news from Barchart
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