US Equities Analysis

NSC — Norfolk Southern

Research evidence pack

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2. Company Fundamentals

2.1 Competitiveness

Metric Value
Operating Margins 32.26%
Profit Margins 21.91%
Return on Equity 17.61%
Return on Assets 5.89%
Free Float 0.22B
Dividend Yield 1.73%
Short Int % Utilisation 3.64%

2.2 Growth

Metric Value
Revenue Growth 0.2%
Free Cash Flow 1.3B
EBITDA 15.34 (Ratio)
Enterprise Value 85.68B
EV/Revenue 7.03
EV/EBITDA 15.34

Revenue growth of 0.2% suggests mature or challenged top-line momentum.

2.3 Management

Role Metric
Consensus Rating N/A

2.4 Return

Metric Value
Expected Return (Ann.)* 23.94%
Risk / Std Dev (Ann.)* 20.47%
1-Year Price Return* 21.22%

Latest Market Data (as of 2026-08-14, US Eastern time):

Metric Value
Last Price $334.41
52-Week Range $268.23 – $358.60
Observation Count 251 trading days

The return and risk statistics use daily adjusted closes from the retrieved one-year series and annualise daily moments using 252 trading days. The last price is the latest regular-market price reported for the stated date. Source: Yahoo Finance market data.

2.5 FCFF DCF Valuation

Valuation basis: This research model follows a five-year, unlevered FCFF DCF. It starts from reported annual operating inputs, forecasts revenue and operating cash conversion under an explicit mechanical policy, discounts FCFF at WACC, applies a Gordon-growth terminal value, and bridges enterprise value to an indicative common-equity value per share. It is an analytical estimate rather than a recommendation or personalised target price.

Step 1 — Forecast Operating Profit and NOPAT

Reported operating input Value
Revenue $12.18B
Prior annual revenue $12.12B
EBIT $4.46B
Tax rate 21.60%
NOPAT = EBIT × (1 − tax rate) $3.49B
Forecast start-growth basis 0.47%
Forecast policy latest reported annual revenue growth, bounded to -10.00% / 15.00%

Step 2 — Calculate FCFF

Current FCFF building block Value
NOPAT $3.49B
Add: depreciation & amortisation $1.39B
Less: capital expenditure -$2.20B
Less/(add): working-capital cash-flow movement $301.00M
Current unlevered FCFF $2.98B

Explicit FCFF forecast

Forecast year Revenue growth NOPAT D&A Capex Change in NWC FCFF Present value
1 0.47% $3.51B $1.40B -$2.21B $302.42M $3.00B $2.86B
2 0.98% $3.55B $1.41B -$2.03B $305.37M $3.23B $2.80B
3 1.49% $3.60B $1.43B -$1.85B $309.91M $3.49B $2.74B
4 1.99% $3.67B $1.46B -$1.68B $316.08M $3.77B $2.69B
5 2.50% $3.76B $1.50B -$1.50B $323.98M $4.09B $2.64B

Step 3 — Determine the Discount Rate (WACC)

WACC input Value
Risk-free rate 4.71%
Equity risk premium assumption 5.50%
Beta 1.27
Cost of equity 11.69%
Pre-tax cost of debt 4.55%
WACC 10.20%
WACC validation within standard range

Step 4 — Estimate Terminal Value

Terminal-value input Value
Perpetuity growth rate 2.50%
Terminal value $54.41B
Implied terminal EV / EBITDA 8.64x
Terminal value as % of enterprise value 70.94%

Step 5 — Discount Cash Flows to Enterprise Value

Enterprise-value component Value
Present value of explicit FCFF $13.71B
Present value of terminal value $33.48B
Indicated enterprise value $47.20B
Discounting convention mid-year for explicit FCFF; terminal value discounted at year-end five

Step 6 — Convert Enterprise Value to Equity Value

Equity bridge Value
Indicated enterprise value $47.20B
Less: gross interest-bearing debt $17.30B
Add: cash and equivalents $1.53B
Add: affiliate investments $0.00
Less: minority interests $0.00
Indicated common equity value $31.42B

Step 7 — Calculate Indicative Value Per Share

Per-share output Value
Shares used 225,300,000.00
Share-count basis reported diluted weighted-average shares
Current market price $341.34
DCF indicative value per share $139.47
Indicative value vs. market price -59.14%

Model Integrity Checks

Check Result
Perpetuity growth is below the risk-free rate pass
Perpetuity growth is below WACC pass
WACC is within the configured operating-company range pass
Terminal-year FCFF is positive pass
Terminal capex converges to D&A pass
Terminal-value concentration within review band
Implied price differs from spot by more than 30% review required

2.6 Investor-Style Research Screen

Educational screen Result
Buffett-inspired cash-quality checks 3/4 evidenced checks
Lynch-inspired balance-and-growth checks 4/4 evidenced checks

Data lineage: Yahoo Finance public market and reported-statement data; retrieval timestamp: 2026-08-18 17:43:51.197411 UTC; latest reported fiscal period: 2025-12-31 00:00:00. Default assumptions: five-year forecast, mid-year discounting for explicit FCFF, a maximum 2.50% perpetuity-growth rate below both WACC and the risk-free rate, historical operating-ratio persistence, and capex convergence to D&A by year five. No sell-side consensus or management guidance is substituted for reported inputs. This is research and analysis only, not personalized financial advice.

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