Norfolk Southern (NSC) Stock Soars on Strong Q3 Results: Analyst Price Targets Rise
Norfolk Southern Corporation (NSC) has been riding a wave of positive sentiment following its impressive third-quarter earnings report. Several analysts have revised their price targets upwards, reflecting confidence in the company’s strong performance and optimistic outlook.
The key takeaway from the results, according to RBC Capital Markets analyst Walter Spracklin, is the significant operational improvements driven by COO John Orr’s efforts. These improvements have translated into robust performance, particularly when compared to peers who faced challenges during the quarter. Spracklin raised his price target to $282 from $272 while maintaining his Outperform rating.
Adding to the bullish sentiment, management indicated that capital expenditures are expected to decline in 2025 compared to 2024. This shift is anticipated to result in higher free cash flow growth next year, which could pave the way for increased shareholder returns and/or debt reduction, Spracklin notes.
BofA Securities analyst Ken Hoexter echoed the positive outlook, boosting his price target to $291 from $276 and reaffirming a Buy rating. While Hoexter anticipates a slight decline in the fourth-quarter operating ratio, he remains confident in NSC’s ability to accelerate earnings through continued productivity improvements.
Benchmark analyst Nathan P. Martin also joined the chorus of bullish analysts, raising his price target to $285 from $270 and reiterating his Buy rating. Martin expects a 140-basis-point quarter-over-quarter decline in the operating ratio (OR) in the fourth quarter, but projects a 400-basis-point year-over-year improvement, leading to a strong second-half average OR.
Despite the overall optimism, Stephens analyst Daniel Imbro maintains an Equal-Weight rating and a price target of $263. While acknowledging the company’s strong third-quarter performance, Imbro remains cautious about the anticipated OR decline in the fourth quarter.
Loop Capital analyst Rick Paterson, however, remains firmly bullish, increasing his price target to $287 from $285 and reaffirming a Buy rating. Paterson cited the company’s impressive performance and raised his EPS estimates for 2024 and 2025.
Investors seeking exposure to NSC can consider the Tidal ETF Trust Aztlan North America Nearshoring Stock Selection ETF (NRSH) and Themes US Infrastructure ETF (HWAY).
NSC shares closed down 1.79% at $255.78 on Wednesday.
