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Atlanta, Georgia-based Norfolk Southern Corporation (NSC) provides rail transportation services. Valued at $58.5 billion by market cap, the company transports raw materials, intermediate products, and finished goods via interchange with rail carriers. NSC also transports overseas freight through several Atlantic and Gulf Coast ports.
Shares of this leader in the transportation industry have underperformed the broader market over the past year. NSC has declined 1.2% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 22.8%. However, in 2025, NSC’s stock rose 6.1%, surpassing SPX’s 4.5% rise on a YTD basis.
Narrowing the focus, NSC’s underperformance is also apparent compared to the iShares Transportation Average ETF (IYT). The exchange-traded fund has gained about 4.8% over the past year. Moreover, the ETF’s 7.2% gains on a YTD basis outshine the stock’s returns over the same time frame.
NSC's underperformance can be attributed to a $600 million class-action settlement for a derailment, as well as a separate settlement with the federal government for cleanup and monitoring. Despite challenges from hurricanes in the Southeast, the railroad hauled 3% more freight in Q4, but revenue slipped due to lower fuel prices and a shift to less-profitable shipments. NSC is working to navigate sector-specific challenges such as fluctuating demand and regulatory updates.
On Jan. 29, NSC shares closed up more than 1% after reporting its Q4 results. Its adjusted EPS of $3.04 beat Wall Street expectations of $2.95. The company’s revenue was $3.02 billion, missing Wall Street forecasts of $3.03 billion.
For fiscal 2025, ending in December, analysts expect NSC’s EPS to grow 9.9% to $13.02 on a diluted basis. The company’s earnings surprise history is mixed. It beat the consensus estimate in three of the last four quarters while missing the forecast on another occasion.
Among the 25 analysts covering NSC stock, the consensus is a “Moderate Buy.” That’s based on 13 “Strong Buy” ratings, one “Moderate Buy,” 10 “Holds,” and one “Strong Sell.”
This configuration is less bullish than a month ago, with 14 analysts suggesting a “Strong Buy.”
On Feb. 3, Loop Capital downgraded NSC to a “Hold” rating with a price target of $256, implying a potential upside of 2.8% from current levels.
The mean price target of $277.26 represents an 11.3% premium to NSC’s current price levels. The Street-high price target of $309 suggests an upside potential of 24.1%.
