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NORFOLK SOUTHERN CORP (NSC) Stock Fundamental Analysis

NYSE:NSC - New York Stock Exchange, Inc. - US6558441084 - Common Stock

251.85  0 (0%)

After market: 251.85 0 (0%)

Fundamental Rating

4

Taking everything into account, NSC scores 4 out of 10 in our fundamental rating. NSC was compared to 38 industry peers in the Ground Transportation industry. NSC has a medium profitability rating, but doesn't score so well on its financial health evaluation. NSC is valied quite expensively at the moment, while it does show a decent growth rate.


Dividend Valuation Growth Profitability Health

6

1. Profitability

1.1 Basic Checks

In the past year NSC was profitable.
In the past year NSC had a positive cash flow from operations.
In the past 5 years NSC has always been profitable.
NSC had a positive operating cash flow in each of the past 5 years.
NSC Yearly Net Income VS EBIT VS OCF VS FCFNSC Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 1B 2B 3B 4B 5B

1.2 Ratios

Looking at the Return On Assets, with a value of 5.58%, NSC is in the better half of the industry, outperforming 60.53% of the companies in the same industry.
With a decent Return On Equity value of 17.50%, NSC is doing good in the industry, outperforming 71.05% of the companies in the same industry.
NSC has a better Return On Invested Capital (8.82%) than 71.05% of its industry peers.
The Average Return On Invested Capital over the past 3 years for NSC is in line with the industry average of 7.67%.
Industry RankSector Rank
ROA 5.58%
ROE 17.5%
ROIC 8.82%
ROA(3y)6.86%
ROA(5y)6.61%
ROE(3y)20.65%
ROE(5y)18.69%
ROIC(3y)9.42%
ROIC(5y)8.92%
NSC Yearly ROA, ROE, ROICNSC Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 10 20 30

1.3 Margins

The Profit Margin of NSC (19.82%) is better than 81.58% of its industry peers.
NSC's Profit Margin has declined in the last couple of years.
NSC has a Operating Margin of 36.33%. This is amongst the best in the industry. NSC outperforms 89.47% of its industry peers.
NSC's Operating Margin has been stable in the last couple of years.
Looking at the Gross Margin, with a value of 49.06%, NSC is in line with its industry, outperforming 57.89% of the companies in the same industry.
In the last couple of years the Gross Margin of NSC has remained more or less at the same level.
Industry RankSector Rank
OM 36.33%
PM (TTM) 19.82%
GM 49.06%
OM growth 3Y-1.93%
OM growth 5Y-1.14%
PM growth 3Y-9.93%
PM growth 5Y-8.36%
GM growth 3Y-2.03%
GM growth 5Y-0.36%
NSC Yearly Profit, Operating, Gross MarginsNSC Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 10 20 30 40 50

2

2. Health

2.1 Basic Checks

NSC has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
The number of shares outstanding for NSC has been reduced compared to 1 year ago.
NSC has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, NSC has a worse debt to assets ratio.
NSC Yearly Shares OutstandingNSC Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 50M 100M 150M 200M 250M
NSC Yearly Total Debt VS Total AssetsNSC Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 10B 20B 30B 40B

2.2 Solvency

NSC has an Altman-Z score of 2.13. This is not the best score and indicates that NSC is in the grey zone with still only limited risk for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 2.13, NSC is doing worse than 63.16% of the companies in the same industry.
NSC has a Debt/Equity ratio of 1.21. This is a high value indicating a heavy dependency on external financing.
With a Debt to Equity ratio value of 1.21, NSC is not doing good in the industry: 71.05% of the companies in the same industry are doing better.
Industry RankSector Rank
Debt/Equity 1.21
Debt/FCF N/A
Altman-Z 2.13
ROIC/WACC1.09
WACC8.12%
NSC Yearly LT Debt VS Equity VS FCFNSC Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 5B 10B 15B

2.3 Liquidity

A Current Ratio of 0.73 indicates that NSC may have some problems paying its short term obligations.
With a Current ratio value of 0.73, NSC is not doing good in the industry: 81.58% of the companies in the same industry are doing better.
A Quick Ratio of 0.65 indicates that NSC may have some problems paying its short term obligations.
NSC has a Quick ratio of 0.65. This is amonst the worse of the industry: NSC underperforms 84.21% of its industry peers.
Industry RankSector Rank
Current Ratio 0.73
Quick Ratio 0.65
NSC Yearly Current Assets VS Current LiabilitesNSC Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 1B 2B 3B

4

3. Growth

3.1 Past

The earnings per share for NSC have decreased by -5.75% in the last year.
NSC shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 4.30% yearly.
NSC shows a decrease in Revenue. In the last year, the revenue decreased by -1.20%.
NSC shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 1.19% yearly.
EPS 1Y (TTM)-5.75%
EPS 3Y8.3%
EPS 5Y4.3%
EPS Q2Q%22.64%
Revenue 1Y (TTM)-1.2%
Revenue growth 3Y7.49%
Revenue growth 5Y1.19%
Sales Q2Q%2.69%

3.2 Future

The Earnings Per Share is expected to grow by 9.41% on average over the next years. This is quite good.
NSC is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.01% yearly.
EPS Next Y1.96%
EPS Next 2Y8.02%
EPS Next 3Y9.86%
EPS Next 5Y9.41%
Revenue Next Year-0.09%
Revenue Next 2Y1.99%
Revenue Next 3Y2.98%
Revenue Next 5Y4.01%

3.3 Evolution

The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
NSC Yearly Revenue VS EstimatesNSC Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 5B 10B 15B
NSC Yearly EPS VS EstimatesNSC Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 5 10 15 20

3

4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 21.66, NSC is valued on the expensive side.
Based on the Price/Earnings ratio, NSC is valued a bit cheaper than the industry average as 65.79% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of NSC to the average of the S&P500 Index (28.19), we can say NSC is valued slightly cheaper.
With a Price/Forward Earnings ratio of 18.37, NSC is valued on the expensive side.
Based on the Price/Forward Earnings ratio, NSC is valued a bit cheaper than the industry average as 71.05% of the companies are valued more expensively.
NSC's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 24.37.
Industry RankSector Rank
PE 21.66
Fwd PE 18.37
NSC Price Earnings VS Forward Price EarningsNSC Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30

4.2 Price Multiples

The rest of the industry has a similar Enterprise Value to EBITDA ratio as NSC.
Industry RankSector Rank
P/FCF N/A
EV/EBITDA 12.7
NSC Per share dataNSC EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 20 40 60

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of NSC may justify a higher PE ratio.
PEG (NY)11.06
PEG (5Y)5.04
EPS Next 2Y8.02%
EPS Next 3Y9.86%

6

5. Dividend

5.1 Amount

NSC has a Yearly Dividend Yield of 2.19%.
NSC's Dividend Yield is rather good when compared to the industry average which is at 1.27. NSC pays more dividend than 94.74% of the companies in the same industry.
NSC's Dividend Yield is comparable with the S&P500 average which is at 2.28.
Industry RankSector Rank
Dividend Yield 2.19%

5.2 History

The dividend of NSC is nicely growing with an annual growth rate of 12.05%!
NSC has paid a dividend for at least 10 years, which is a reliable track record.
NSC has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)12.05%
Div Incr Years7
Div Non Decr Years23
NSC Yearly Dividends per shareNSC Yearly Dividends per shareYearly Dividends per share 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 1 2 3 4 5

5.3 Sustainability

NSC pays out 50.56% of its income as dividend. This is a bit on the high side, but may be sustainable.
NSC's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP50.56%
EPS Next 2Y8.02%
EPS Next 3Y9.86%
NSC Yearly Income VS Free CF VS DividendNSC Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 2016 2017 2018 2019 2020 2021 2022 2023 1B 2B 3B 4B 5B
NSC Dividend Payout.NSC Dividend Payout, showing the Payout Ratio.NSC Dividend Payout.PayoutRetained Earnings

NORFOLK SOUTHERN CORP

NYSE:NSC (1/22/2025, 7:37:39 PM)

After market: 251.85 0 (0%)

251.85

0 (0%)

Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupTransportation
GICS IndustryGround Transportation
Earnings (Last)10-22 2024-10-22/bmo
Earnings (Next)01-29 2025-01-29/amc
Inst Owners77.59%
Inst Owner Change-0.09%
Ins Owners0.02%
Ins Owner Change0.32%
Market Cap56.98B
Analysts75
Price Target284.84 (13.1%)
Short Float %0.94%
Short Ratio1.83
Dividend
Industry RankSector Rank
Dividend Yield 2.19%
Yearly Dividend5.4
Dividend Growth(5Y)12.05%
DP50.56%
Div Incr Years7
Div Non Decr Years23
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)4.69%
Min EPS beat(2)3.5%
Max EPS beat(2)5.87%
EPS beat(4)2
Avg EPS beat(4)0.52%
Min EPS beat(4)-5%
Max EPS beat(4)5.87%
EPS beat(8)3
Avg EPS beat(8)-0.34%
EPS beat(12)5
Avg EPS beat(12)0.71%
EPS beat(16)9
Avg EPS beat(16)1.95%
Revenue beat(2)0
Avg Revenue beat(2)-1.47%
Min Revenue beat(2)-2.12%
Max Revenue beat(2)-0.81%
Revenue beat(4)0
Avg Revenue beat(4)-1.67%
Min Revenue beat(4)-2.53%
Max Revenue beat(4)-0.81%
Revenue beat(8)1
Avg Revenue beat(8)-1.4%
Revenue beat(12)5
Avg Revenue beat(12)-0.35%
Revenue beat(16)8
Avg Revenue beat(16)-0.03%
PT rev (1m)0.4%
PT rev (3m)6.19%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-6.85%
EPS NY rev (1m)0%
EPS NY rev (3m)0.55%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-4.48%
Revenue NY rev (1m)-0.07%
Revenue NY rev (3m)-0.91%
Valuation
Industry RankSector Rank
PE 21.66
Fwd PE 18.37
P/S 4.68
P/FCF N/A
P/OCF 15.1
P/B 4.13
P/tB 4.13
EV/EBITDA 12.7
EPS(TTM)11.63
EY4.62%
EPS(NY)13.71
Fwd EY5.44%
FCF(TTM)-1.89
FCFYN/A
OCF(TTM)16.68
OCFY6.62%
SpS53.8
BVpS60.93
TBVpS60.93
PEG (NY)11.06
PEG (5Y)5.04
Profitability
Industry RankSector Rank
ROA 5.58%
ROE 17.5%
ROCE 11.17%
ROIC 8.82%
ROICexc 9.05%
ROICexgc 9.05%
OM 36.33%
PM (TTM) 19.82%
GM 49.06%
FCFM N/A
ROA(3y)6.86%
ROA(5y)6.61%
ROE(3y)20.65%
ROE(5y)18.69%
ROIC(3y)9.42%
ROIC(5y)8.92%
ROICexc(3y)9.66%
ROICexc(5y)9.13%
ROICexgc(3y)9.66%
ROICexgc(5y)9.13%
ROCE(3y)11.93%
ROCE(5y)11.29%
ROICexcg growth 3Y2.75%
ROICexcg growth 5Y-2.29%
ROICexc growth 3Y2.75%
ROICexc growth 5Y-2.29%
OM growth 3Y-1.93%
OM growth 5Y-1.14%
PM growth 3Y-9.93%
PM growth 5Y-8.36%
GM growth 3Y-2.03%
GM growth 5Y-0.36%
F-Score7
Asset Turnover0.28
Health
Industry RankSector Rank
Debt/Equity 1.21
Debt/FCF N/A
Debt/EBITDA 2.89
Cap/Depr 313.35%
Cap/Sales 34.52%
Interest Coverage 250
Cash Conversion 65.49%
Profit Quality N/A
Current Ratio 0.73
Quick Ratio 0.65
Altman-Z 2.13
F-Score7
WACC8.12%
ROIC/WACC1.09
Cap/Depr(3y)154.99%
Cap/Depr(5y)154.34%
Cap/Sales(3y)15.93%
Cap/Sales(5y)16.19%
Profit Quality(3y)69.28%
Profit Quality(5y)76.68%
High Growth Momentum
Growth
EPS 1Y (TTM)-5.75%
EPS 3Y8.3%
EPS 5Y4.3%
EPS Q2Q%22.64%
EPS Next Y1.96%
EPS Next 2Y8.02%
EPS Next 3Y9.86%
EPS Next 5Y9.41%
Revenue 1Y (TTM)-1.2%
Revenue growth 3Y7.49%
Revenue growth 5Y1.19%
Sales Q2Q%2.69%
Revenue Next Year-0.09%
Revenue Next 2Y1.99%
Revenue Next 3Y2.98%
Revenue Next 5Y4.01%
EBIT growth 1Y5.54%
EBIT growth 3Y5.41%
EBIT growth 5Y0.04%
EBIT Next Year38.84%
EBIT Next 3Y17.51%
EBIT Next 5Y13.25%
FCF growth 1Y-116.22%
FCF growth 3Y-27.11%
FCF growth 5Y-14.1%
OCF growth 1Y-13.56%
OCF growth 3Y-4.39%
OCF growth 5Y-3.13%