Norfolk Southern: Will the Rally Continue?

Norfolk Southern

Norfolk Southern (NSC) shares have risen 38.2% YTD (year-to-date). Norfolk Southern shares have outperformed the broader market as of April 24. The NASDAQ, the S&P 500, and the Dow Jones Index have risen 22.1%, 16.8%, and 14%, respectively, during the same period.

Norfolk Southern: Will the Rally Continue?

The stock has also outperformed the iShares Transportations Average ETF’s (IYT) YTD returns of 19.1%. The ETF tracks the performance of transportation stocks in the Dow Jones Industrial Average.

Norfolk Southern’s YTD gain is the highest among the Class I railroad companies. CSX (CSX), Union Pacific (UNP), and Kansas City Southern (KSU) have gained 27.7%, 27.9%, and 30%, respectively, YTD.

Back-to-back quarters of better-than-expected financial results along with initiatives to improve the operating ratio and shareholders’ friendly moves are driving the stock higher. Norfolk Southern beat analysts’ earnings estimates in the previous ten quarters. The company has registered strong double-digit growth.

Will the rally continue?

Norfolk Southern stock has received a consensus “buy” recommendation from the analysts polled by Reuters. Approximately 54% of the analysts have a bullish stance, nearly 38% say to hold it, and the remaining 8% have bearish views on the stock.

According to the analysts polled by Reuters, Norfolk Southern stock doesn’t have much upside potential. Analysts have provided an average target price of $209.48 on the stock, which depicts an increase of 1.3% in one year from the current market price of $206.70.