Norfolk Southern's Q3 Beat Fuels Analyst Optimism Despite Q4 Challenges—Long-Term Growth Potential In Focus

Several analysts revised the price target on Norfolk Southern Corporation (NYSE:NSC) following third quarter results.

On Tuesday, Norfolk Southern reported adjusted earnings of $3.25 per share, beating analyst estimates of $3.11 per share.

The company said it remains on track to achieve its adjusted operating ratio targets for the second half and full year of 2024.

RBC Capital Markets analyst Walter Spracklin raised the price target to $282 from $272 while maintaining the Outperform rating.

The analyst writes that the key takeaway from the results is that COO John Orr’s efforts are driving substantial operational changes, leading to strong performance, especially when compared to a peer that faced challenges during the quarter.

Additionally, management indicated that capital expenditures are expected to decrease in 2025 compared to 2024, which should lead to higher free cash flow growth next year, adds the analyst.

The analyst expects this shift to pave the way for increased shareholder returns and/or debt reduction.

The analyst adds that continued progress across several metrics this quarter reinforces the confidence in management’s capacity to drive further improvements moving forward. The analyst raised FY24 EPS estimates to $11.91 from ...