Norfolk Southern Corporation Just Recorded A 13% EPS Beat: Here's What Analysts Are Forecasting Next

It's been a pretty great week for Norfolk Southern Corporation (NYSE:NSC) shareholders, with its shares surging 11% to US$250 in the week since its latest second-quarter results. Revenues were US$3.0b, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of US$3.25 were also better than expected, beating analyst predictions by 13%. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Norfolk Southern

Following last week's earnings report, Norfolk Southern's 22 analysts are forecasting 2024 revenues to be US$12.3b, approximately in line with the last 12 months. Statutory earnings per share are predicted to leap 24% to US$9.83. In the lead-up to this report, the analysts had been modelling revenues of US$12.4b and earnings per share (EPS) of US$9.60 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The consensus price target was unchanged at US$265, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Norfolk Southern, with the most bullish analyst valuing it at US$292 and the most bearish at US$175 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 3.0% growth on an annualised basis. That is in line with its 3.5% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 7.7% per year. So although Norfolk Southern is expected to maintain its revenue growth rate, it's forecast 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. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Norfolk Southern going out to 2026, and you can see them free on our platform here..

We don't want to rain on the parade too much, but we did also find 3 warning signs for Norfolk Southern (1 makes us a bit uncomfortable!) that you need to be mindful of.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com