Yahoo Finance Analysts Are Updating Their Norfolk Southern Corporation (NYSE:NSC) Estimates After Its First-Quarter Results
The first-quarter results for Norfolk Southern Corporation (NYSE:NSC) were released last week, making it a good time to revisit its performance. Norfolk Southern reported in line with analyst predictions, delivering revenues of US$3.0b and statutory earnings per share of US$0.23, suggesting the business is executing well and in line with its plan. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Norfolk Southern after the latest results.
See our latest analysis for Norfolk Southern
Following the latest results, Norfolk Southern's 21 analysts are now forecasting revenues of US$12.5b in 2024. This would be a satisfactory 3.6% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to shoot up 73% to US$10.79. In the lead-up to this report, the analysts had been modelling revenues of US$12.5b and earnings per share (EPS) of US$9.41 in 2024. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the solid gain to earnings per share expectations following these results.
The consensus price target was unchanged at US$270, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Norfolk Southern, with the most bullish analyst valuing it at US$305 and the most bearish at US$233 per share. This is a very narrow spread of estimates, implying either that Norfolk Southern is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Norfolk Southern's past performance and to peers in the same industry. The analysts are definitely expecting Norfolk Southern's growth to accelerate, with the forecast 4.9% annualised growth to the end of 2024 ranking favourably alongside historical growth of 3.2% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 7.9% per year. It seems obvious that, while the future growth outlook is brighter than the recent past, Norfolk Southern is expected to grow slower than the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Norfolk Southern following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Norfolk Southern's revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$270, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Norfolk Southern. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Norfolk Southern analysts - going out to 2026, and you can see them free on our platform here.
Before you take the next step you should know about the 4 warning signs for Norfolk Southern (1 is concerning!) that we have uncovered.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
