Norfolk Southern Corporation
Orin's own judgment of how firmly the evidence points one way — not the chance the price goes up.
Norfolk Southern's operating recovery is well underway—Q2 2026 revenue grew 11.4% YoY to $3.465B and the company has beaten EPS estimates in seven of the last eight quarters—but at 27.6x trailing earnings (an 8.5% premium to the peer median of 25.44x), much of the improvement appears priced in.
The pending $85B Union Pacific acquisition creates binary risk: a deal could deliver a significant premium, while regulatory rejection or collapse would leave the stock exposed at a full valuation. With Q3 2026 results due October 22 and the stock trading at $323.48 between its 50-day ($326.96) and 200-day ($312.97) moving averages, the risk/reward is balanced enough to warrant a hold pending clarity on both earnings trajectory and merger outcome.
What could go wrong
- Merger collapse. Union Pacific's $85B acquisition bid faces pushback from labor unions and farm groups; regulatory denial could remove the deal premium embedded in the stock.
- Valuation premium. NSC trades at 27.6x earnings versus a peer median of 25.44x (8.5% premium) and 16.26x EV/EBITDA versus 15.50x median, leaving limited margin of safety if growth disappoints.
- Uneven revenue growth. Q1 2026 revenue grew only 0.17% YoY versus 11.4% in Q2 2026, suggesting volume recovery is not yet consistent across quarters.
- Elevated leverage. Total debt of $17.09B against stockholders' equity of $15.55B as of FY2025 constrains financial flexibility, particularly if the merger does not proceed.
What would change my mind
Where this comes from: results, quarter to 30 Jun · earnings vs estimates, 23 Jul · peer comparison, 19 Oct · news, 6 Oct. Orin's read on NSC; not advice.
How has the share price moved?
Up 20.6% over twelve months, from $281.64 on 27 Oct 2025 to $339.74 at the Tue 27 Oct 2026 close. Its highest close in that time was $352.98 on 24 Aug 2026; the last close is 3.8% below it.
- Green line: the closing price each trading day.
- Grey line: the average closing price over the last 50 trading days.
- Dashed amber line: the same over the last 200 trading days — a slower, smoother line.
- Bars along the bottom: shares traded each day — green when it closed higher than the day before, rose when lower (the most, 3.3M, on 28 May 2026).
- Flags: the company's filings, on the day they were made (a 10-Q is the quarterly report and a 10-K the annual report; an 8-K reports a major event).
On file
All NSC filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| BlackRock | $5.0B | 0.1% |
| Vanguard Capital Management | $4.6B | 0.1% |
| State Street | $3.2B | 0.1% |
| Vanguard Portfolio Management | $2.3B | 0.1% |
| Millennium Management | $1.6B | 0.6% |
| Geode Capital Management | $1.6B | 0.1% |
| Bank of America | $979.0M | 0.1% |
| Norges Bank | $956.6M | 0.1% |
| Pentwater Capital Management | $873.0M | 5.3% |
| Northern Trust | $822.5M | 0.1% |
130 of the 815 filers we track · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 208 Form 4 filings; open-market trades net $1.0M. Of the 50 on hand, none was an open-market trade — the rest are grants, option exercises and tax withholding.
Ask Orin about NSC
Orin answers questions about NSC from its filings, transcripts and numbers — with the source behind every claim. Your own desk starts with 3 free days, card required.
Start 3 free days →How is it priced, against its own past and its sector?
Priced at 28.5× its last 12 months of profit (Tue 27 Oct close) — higher than in 4 of its last 5 fiscal years (middle 22.6×); the typical Industrials company on the NYSE is at 33.7×.
| Measure | Now | Its usual | Sector |
|---|---|---|---|
| P/E | 28.5×above usual | 22.6× | 33.7× |
| P/S | 5.89×above usual | 4.54× | — |
| EV/EBITDA | 16.6×above usual | 13.8× | — |
| P/B | 4.6×above usual | 4.2× | — |
- "Its usual" is the middle of its own last 5 fiscal years.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
P/S: the company's total market value divided by one year of revenue. Used when there is no profit to measure.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
P/B: the share price divided by the book value per share — what the company owns minus what it owes, as its accounts record it. When book value is tiny, P/B swings wildly and says little.
What do the analysts who cover it publish?
The analysts' average 12-month price target is $365 (from $350 to $400) — 7% above the Tue 27 Oct close price. That is their published opinion, not Orin's.
$365
$350 – $400 · +7% against the last close
- 6 buy or overweight
- 11 hold
- 0 underweight or sell
Price target: the share price an analyst publishes for about 12 months ahead. It is the opinion of the firm that wrote it; the average is across the firms that cover the company.
Overweight / underweight: analysts' rating words: overweight means the firm expects the stock to do better than the others it covers, underweight worse. Their words, not Orin's.
How is it priced next to the companies it is compared to?
Priced at 28.5× its last 12 months of profit. Only 2 of the 2 companies it is compared to made a profit (CSX 27.1×, UNP 23.3×), so there is no typical P/E.
| Company | Market value | P/E | EV/EBITDA | Gross margin | Net margin | ROE |
|---|---|---|---|---|---|---|
| NSCNorfolk Southern Corporation | $76B | 28.5× | 16.6× | 52.9% | 20.7% | 17% |
| CSXCSX Corporation | $97B | 27.1× | 16.0× | 36.4% | 24.0% | 26% |
| UNPUnion Pacific Corporation | $178B | 23.3× | 15.1× | 44.0% | 28.9% | 38% |
- The list of companies is the data vendor's choice, so it can include a company a person would not have picked.
Market value: the share price times the number of shares — what the whole company is priced at.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
Gross margin: the share of each $1 of sales left after the direct cost of making what was sold.
Net margin: the share of each $1 of sales kept as profit after every cost. Below zero, the company lost money.
ROE: return on equity: one year of profit as a share of the shareholders' money in the business (its book value).
Is it priced high or low compared with its own past?
Priced at 28.5× its last 12 months of profit (Tue 27 Oct close). It has no full fiscal year on file since its history starts, so there is nothing of its own to compare with.
- Now28.5×
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
Fiscal year (FY): the company's own 12-month accounting year, which need not match the calendar year.
How has its sector been priced?
Industrials companies on the NYSE were priced at a typical 33.7× their yearly profit (Tue 27 Oct close).
- Now33.7×
- Each year is the middle of that calendar year's daily sector P/E; "Now" is the Tue 27 Oct close figure, the same one in the table above.
Sector P/E: the middle P/E of the companies in the same sector on the same stock exchange, as the data vendor works it out each day.
What does a cash-flow model say a share is worth?
A standard cash-flow model puts it at $113 a share — 66% below the $337.82 price it was computed against (27 Oct).
| Model | Value a share | Against the price then |
|---|---|---|
| Standard | $113 | 66% below $337.82 |
| Levered | $52 | 85% below $337.82 |
Discounted cash flow: a model's estimate of what the company is worth today, from the cash it is forecast to make in future years. Small changes in the forecast move it a lot, and it says little about a company that loses money.
Standard / levered: two versions of the cash-flow model: the standard one counts the cash before the company pays its lenders, the levered one after.