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RBC Capital raised its target for the stock from $330 to $350 but kept its rating at Sector Perform, which means they expect it to perform in line with other companies in the industry. This is a routine adjustment rather than a change of heart about the company's prospects. The new target is slightly below the $365 average across all analysts. While the business is currently working through a massive merger offer from Union Pacific, this specific move suggests analysts are simply aligning their targets with where the stock is already trading.
Source: RBC Capital
Norfolk Southern signed a deal with Schneider National, a major trucking and logistics firm, to combine their networks. The partnership aims to move more freight using intermodal shipping, which involves moving containers by both truck and rail to save on fuel and costs.
This is a key win for Norfolk Southern as it tries to pull more business away from the trucking industry. By plugging Schneider’s large fleet of drivers and containers into its rail network, the company can fill more trains and better utilize its tracks in the Eastern U.S.
Source: Business Wire
After Norfolk Southern reported its October results, we updated our fair value and raised our quality score to 3.7. We changed our rating of its management to five out of five and moved our overall call from Buy to Watch. We added the formal merger bid from Union Pacific and the impact of fuel price volatility to our thesis. We have also reset our expectations for how quickly the business can improve its efficiency measure and its cash flow margins.
U.S. Steel is planning to spend nearly 3 billion dollars on a new mill near Pittsburgh. This is a meaningful development for Norfolk Southern because the company's 19,000-mile network is heavily concentrated in the Eastern U.S., and steel production requires the constant movement of heavy raw materials and finished goods.
Large industrial projects like this provide a reliable, multi-year source of freight volume. For a railroad focused on improving its efficiency and closing the profit gap with rivals, adding high-volume industrial customers in its home territory is a clear positive for long-term growth.
Source: WSJ
Norfolk Southern declared a quarterly dividend of $1.35 per share, payable on November 20. This is a routine move for the railroad, which has a long history of returning cash to shareholders through these regular payments.
Source: PRNewsWire
Management has beaten profit estimates in seven of the last eight quarters. They are consistently setting a bar they can clear while the business outruns analyst forecasts.
| Expectation | |
|---|---|
| EPS | $3.27 |
| Revenue | $3.48B |
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