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Norfolk Southern: Why Analysts Are Bullish


Feb. 28 2019, Published 1:30 p.m. ET

Analysts’ bullish stance

Norfolk Southern (NSC) has received a consensus “buy” recommendation from the analysts polled by Reuters. Nearly 50% of the analysts covering the stock have provided bullish recommendations.

Among the 26 analysts covering the stock, five recommended a “strong buy,” eight recommended a “buy,” 11 recommended a “hold,” and two recommended a “sell.” Analysts’ target price of $191.10 represents a potential rise of 5.3% from the current price of $181.41. The current target price is 6.1% higher than the target of $180.05 the day before the earnings release.

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Norfolk Southern has seen an upward revision in its EPS estimates for 2019 and 2020 since it reported its fourth-quarter results on January 24. The mean estimate for Norfolk Southern’s 2019 EPS has risen to $10.43—compared to the estimate of $10.31 on January 23. The company’s 2020 EPS estimate has improved to $11.86 from $11.45.

Peers’ ratings

Analysts have a bullish opinion about most of the US railroad companies (XLI). They have provided a “buy” recommendation on Norfolk Southern’s top peers including Union Pacific (UNP), CSX (CSX), and Kansas City Southern (KSU).

For Union Pacific, 28 analysts recommended a “strong buy,” 12 recommended a “buy,” nine recommended a “hold,” and one recommended a “sell.” Analysts’ target price of $175.96 represents a potential 3.8% increase from its current price of $169.55.

For CSX, six of the 26 analysts recommended a “strong buy,” nine recommended a “buy,” ten recommended a “hold,” and one recommended a “sell.” CSX’s target price of $75.86 represents a potential 4.2% increase from its current price of $72.82.

For Kansas City Southern, four of the 19 analysts recommended a “strong buy,” eight recommended a “buy,” and seven recommended a “hold.” Analysts have a consensus target price of $123.41 on the stock, which signifies an upside of 10.7% from the current market price of $111.50.


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