Norfolk Southern (NSC) Stock Forecast & Price Target

Norfolk Southern is projected to achieve merchandise volume growth of +3% in 2025, outperforming the expected US Industrial Production growth of +1.2%, indicating strong performance relative to the broader economic environment. Operational improvements are notable, with locomotive productivity and terminal dwell times enhancing by 14% and 1% year-over-year, respectively, contributing positively to operational efficiency. Furthermore, the company anticipates a 2% year-over-year revenue growth alongside a 130 basis point improvement in the operating ratio, surpassing market expectations of +1.6% revenue growth for the year, which underscores a robust financial outlook.

Norfolk Southern is facing significant operational challenges, as evidenced by a three-point decline in merchandise plan compliance and a two-point deterioration in intermodal service composite, indicating potential inefficiencies. Additionally, the company's earnings per share (EPS) estimate for 2025 has been revised downward from $12.76 to $12.58, accompanied by a reduction in revenue growth expectations from 1.9% to 1.3%, reflecting a broader negative trend. Furthermore, projected intermodal revenue is now expected to decline by 1% in 2025, with ongoing macroeconomic pressures and heightened competition contributing to an overall unfavorable outlook.