# Norfolk Southern (NSC.US)

Canonical: https://gigainvestors.com/s/NSC

Analysis as of: 2026-10-16T07:30:40.488Z. Financial observations: FY1996–FY2026.

Listing currency: USD. Reporting currency: USD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: $324.83 per share; close as of 2026-10-15.

Estimated value: low $114.98 per share, central $130.33 per share, high $150.77 per share. Buy at or below the central value $130.33 per share. Valuation as of 2026-10-16T07:30:40.488Z; scenarios are not confidence intervals.

Expected annual return: 5.7% at the stated quote. About 5.7% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: pass

- 4 revenue declines in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 4

- Years with a net loss: 0

- Operating margin variation: 0.12×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.33×

- FY2018: 0.35×

- FY2019: 0.34×

- FY2020: 0.35×

- FY2021: 0.39×

- FY2022: 0.37×

- FY2023: 0.23×

- FY2024: 0.31×

- FY2025: 0.33×

- LTM to Jun 2026: 0.32×

### moat: fail

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- ROIC, median of available years: 10.6%

- ROIC, second-lowest year: 9.2%

- Typical minus recent gross margin: -7.8 pp

- Typical gross margin (annual median): 34.6%

- Recent gross margin (lower of latest and 3-year median): 42.4%

- Years with nonpositive capital: 0

- Capital spending / revenue: 17.5%

- ROIC including acquisitions, ten-year median: 6.9%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: 9.2%

- FY2017: 13.8%

- FY2018: 11.6%

- FY2019: 11.1%

- FY2020: 10.1%

- FY2021: 12.5%

- FY2022: 13.4%

- FY2023: 7.8%

- FY2024: 9.8%

- FY2025: 10.1%

### economics: fail

- owner earnings cash conversion below threshold

- Owner earnings / net income, 5-yr: 0.80×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $11B

- Net income, five-year total: $14B

- Return on incremental invested capital: 20.3%

- Working capital / revenue, annual change: -0.6 pp

- Working capital / revenue, change between three-year averages: -3.6 pp

- Working capital / revenue, final three-year average: 0.5%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 1.00×

- FY2022: 1.00×

- FY2023: 0.42×

- FY2024: 0.61×

- FY2025: 0.77×

### management: pass

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- potential debt-funded buybacks (informational)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 11.6% vs 9.8%

- Per-share earnings: 5.64 to 11.58 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: -3.0%

- Ordinary dilution, 5-year annual growth: -2.6%

- Market cap gain: $33B

- Cumulative retained earnings: $2.8B

- Diluted shares, 10-year annual growth: -3.0%

- Diluted shares, 5-year annual growth: -2.6%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value growth: 9.4%

- Per-share value change: $5.95

- Per-share value, starting three-year median: $5.64

- Per-share value, ending three-year median: $11.58

- Buybacks concentrated in cheaper years (correlation): 0.53

- Average buyback yield: 3.4%

- Buyback history: 9 years

- Debt-funded buybacks: Yes

- Acquisition spending: $491M

- Cumulative net income, 10 years: $28B

- ROIC, first three-year median: 11.6%

- ROIC, last three-year median: 9.8%

Chart: Earnings per share; fiscal year observations.

- FY2016: $5.64

- FY2017: $18.62

- FY2018: $9.51

- FY2019: $10.25

- FY2020: $7.84

- FY2021: $12.11

- FY2022: $13.88

- FY2023: $8.03

- FY2024: $11.58

- FY2025: $12.75

### accounting: pass

- Sloan accruals: -3.3%

- Receivables to sales index (DSRI): 0.92×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 0.0%

- Earnings backed by cash: Yes

- Operating cash / earnings: 1.52×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.00×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -3.9%

- FY2017: 6.0%

- FY2018: -2.9%

- FY2019: -3.1%

- FY2020: -4.3%

- FY2021: -3.2%

- FY2022: -2.4%

- FY2023: -3.2%

- FY2024: -3.3%

- FY2025: -3.3%

## Holders

- [David Hoeft](https://gigainvestors.com/DAC): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Thomas Gayner](https://gigainvestors.com/MKL): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Andrew Adams](https://gigainvestors.com/MPF): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Daniel Loeb](https://gigainvestors.com/tp): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Price needs cash profits to grow 12.6% a year for ten years · "Norfolk Southern Posts Record Revenue as Freight Demand Strengthens" (finance.yahoo.com, Jul 2026) · sales +3%

Story as of 2026-10-16T09:59:16.501Z; price observation 2026-10-15.

Price needs cash profits to grow 12.6% a year for ten years

- 2025-05-17: Norfolk Southern (NYSE:NSC) Reports Q1 2025 Net Income Surge to US$750 Million ([finance.yahoo.com](https://finance.yahoo.com/news/norfolk-southern-nyse-nsc-reports-172807513.html))

- 2025-07-24: Norfolk Southern stock rises after confirming merger talks with Union Pacific ([finance.yahoo.com](https://finance.yahoo.com/news/norfolk-southern-stock-rises-confirming-133818537.html))

- 2026-02-16: Norfolk Southern Weighs Safety Costs And Merger Attention As Valuation Stretches ([finance.yahoo.com](https://finance.yahoo.com/news/norfolk-southern-weighs-safety-costs-030953351.html))

- 2026-03-16: Norfolk Southern Balances Flat Sales With Rising Costs And Heavy Investment ([finance.yahoo.com](https://finance.yahoo.com/news/norfolk-southern-balances-flat-sales-211032147.html))

- 2026-04-25: Norfolk Southern earnings slip as winter weather impacts rail volume ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/norfolk-southern-earnings-slip-winter-011156278.html))

- 2026-07-23: Norfolk Southern Q2 Earnings Beat on Record Revenue and Volume Growth ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/norfolk-southern-q2-earnings-beat-174300631.html))

### Sales · FY2025–2026

sales +3%; source https://www.sec.gov/Archives/edgar/data/702165/000162828026006268/nsc-20251231.htm; observed 2026-02-09.

- FY2017: $11B 

- FY2018: $11B 

- FY2019: $11B 

- FY2020: $9.8B 

- FY2021: $11B 

- FY2022: $13B 

- FY2023: $12B 

- FY2024: $12B 

- FY2025: $12B 

- FY2026: $13B 

### Gross margin · FY2025

gross margin 42.4%; source https://www.sec.gov/Archives/edgar/data/702165/000162828026006268/nsc-20251231.htm; observed 2026-02-09.

- FY2016: 31.0% 

- FY2017: 33.4% 

- FY2018: 34.6% 

- FY2019: 34.5% 

- FY2020: 34.7% 

- FY2021: 39.2% 

- FY2022: 37.1% 

- FY2023: 50.2% 

- FY2024: 31.0% 

- FY2025: 42.4% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in railroads; annual sales are USD 12.2 billion.

- Source: https://www.sec.gov/Archives/edgar/data/702165/000162828026006268/nsc-20251231.htm (filed 2026-02-09); FY2025: revenue 12180000000; grossProfit 5168000000; margin = grossProfit / revenue.

### Why customers stay

Margins ranged from 31% to 50.2% during 2023–25; it earns 10.6% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-09); FY2023: grossProfit / revenue = 50.2%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-09); FY2024: grossProfit / revenue = 31%.

- Source: https://www.sec.gov/Archives/edgar/data/702165/000162828026006268/nsc-20251231.htm (filed 2026-02-09); FY2025: grossProfit / revenue = 42.4%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-09); 10-year return on capital observations [[2016,0.09210708516039695],[2017,0.13809057047637718],[2018,0.11635532456133901],[2019,0.11103398748312997],[2020,0.10088952724085885],[2021,0.12501824021111846],[2022,0.13446610338910941],[2023,0.07800036478599222],[2024,0.09835173676547518],[2025,0.10101203408956932]]; median 0.10602301078634965. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Spends 7.2% of cash earnings on expansion; earns 20.3% on new investment.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-09); FY2016: growth capex 0; upkeep 1887000000; owner earnings 842000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-09); FY2017: growth capex 668000000; upkeep 1055000000; owner earnings 5404000000. Growth capex / owner earnings = 0.1236121391561806.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-09); FY2018: growth capex 849000000; upkeep 1102000000; owner earnings 2666000000. Growth capex / owner earnings = 0.3184546136534134.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-09); FY2019: growth capex 0; upkeep 2019000000; owner earnings 1841000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-09); FY2020: growth capex 0; upkeep 1494000000; owner earnings 1673000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-09); FY2021: growth capex 289000000; upkeep 1181000000; owner earnings 3005000000. Growth capex / owner earnings = 0.0961730449251248.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-09); FY2022: growth capex 727000000; upkeep 1221000000; owner earnings 3270000000. Growth capex / owner earnings = 0.22232415902140673.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-09); FY2023: growth capex 0; upkeep 2349000000; owner earnings 776000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-09); FY2024: growth capex 0; upkeep 2381000000; owner earnings 1594000000. Growth capex / owner earnings = 0.

- Source: https://www.sec.gov/Archives/edgar/data/702165/000162828026006268/nsc-20251231.htm (filed 2026-02-09); FY2025: growth capex 160238869.3055501; upkeep 2043761130.69445; owner earnings 2222238869.30555. Growth capex / owner earnings = 0.07210695102080757.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-09); Incremental return on capital 0.20325200901007268, from the economics test's unchanged annual inputs.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-09); Dividend observations: [[2016,695000000],[2017,703000000],[2018,844000000],[2019,949000000],[2020,960000000],[2021,1028000000],[2022,1167000000],[2023,1225000000],[2024,1221000000],[2025,1215000000]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/702165/000162828026006268/nsc-20251231.htm (filed 2026-02-09); FY2025: cash repurchases 534000000 USD.

### Are managers owners

Insiders own <0.1% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); NSC.US SharesStats.PercentInsiders = 0.045 percentage points; cache date 2026-10-16.

### What the price says

The price assumes cash profits grow 12.6% yearly over ten years; actual growth was 29.3%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-09); Ten-year compound average after fade. Initial solved rate 0.16926719376557886. Price 324.83; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share 0.7555847568988173 → FY2025 9.863465909034844. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $93.00 per share

- 2016-11: $106.46 per share

- 2016-12: $108.07 per share

- 2017-01: $117.46 per share

- 2017-02: $121.03 per share

- 2017-03: $111.97 per share

- 2017-04: $117.49 per share

- 2017-05: $124.03 per share

- 2017-06: $121.70 per share

- 2017-07: $112.58 per share

- 2017-08: $120.52 per share

- 2017-09: $132.24 per share

- 2017-10: $131.42 per share

- 2017-11: $138.63 per share

- 2017-12: $144.90 per share

- 2018-01: $150.88 per share

- 2018-02: $139.08 per share

- 2018-03: $135.78 per share

- 2018-04: $143.47 per share

- 2018-05: $151.65 per share

- 2018-06: $150.87 per share

- 2018-07: $169.00 per share

- 2018-08: $173.84 per share

- 2018-09: $180.50 per share

- 2018-10: $167.83 per share

- 2018-11: $170.74 per share

- 2018-12: $149.54 per share

- 2019-01: $167.74 per share

- 2019-02: $179.30 per share

- 2019-03: $186.89 per share

- 2019-04: $204.02 per share

- 2019-05: $195.14 per share

- 2019-06: $199.33 per share

- 2019-07: $191.12 per share

- 2019-08: $174.05 per share

- 2019-09: $179.66 per share

- 2019-10: $182.00 per share

- 2019-11: $193.50 per share

- 2019-12: $194.13 per share

- 2020-01: $208.21 per share

- 2020-02: $182.35 per share

- 2020-03: $146.00 per share

- 2020-04: $171.10 per share

- 2020-05: $178.29 per share

- 2020-06: $175.57 per share

- 2020-07: $192.21 per share

- 2020-08: $212.53 per share

- 2020-09: $213.99 per share

- 2020-10: $209.12 per share

- 2020-11: $237.02 per share

- 2020-12: $237.61 per share

- 2021-01: $236.62 per share

- 2021-02: $252.06 per share

- 2021-03: $268.52 per share

- 2021-04: $279.24 per share

- 2021-05: $280.90 per share

- 2021-06: $265.41 per share

- 2021-07: $257.83 per share

- 2021-08: $253.54 per share

- 2021-09: $239.25 per share

- 2021-10: $293.05 per share

- 2021-11: $265.27 per share

- 2021-12: $297.71 per share

- 2022-01: $271.99 per share

- 2022-02: $256.52 per share

- 2022-03: $285.22 per share

- 2022-04: $257.88 per share

- 2022-05: $239.66 per share

- 2022-06: $227.29 per share

- 2022-07: $251.17 per share

- 2022-08: $243.13 per share

- 2022-09: $209.65 per share

- 2022-10: $228.07 per share

- 2022-11: $256.50 per share

- 2022-12: $246.42 per share

- 2023-01: $245.81 per share

- 2023-02: $224.82 per share

- 2023-03: $212.00 per share

- 2023-04: $203.03 per share

- 2023-05: $208.18 per share

- 2023-06: $226.76 per share

- 2023-07: $233.59 per share

- 2023-08: $205.01 per share

- 2023-09: $196.93 per share

- 2023-10: $190.79 per share

- 2023-11: $218.16 per share

- 2023-12: $236.38 per share

- 2024-01: $235.24 per share

- 2024-02: $253.38 per share

- 2024-03: $254.87 per share

- 2024-04: $230.32 per share

- 2024-05: $224.80 per share

- 2024-06: $214.69 per share

- 2024-07: $249.56 per share

- 2024-08: $256.16 per share

- 2024-09: $248.50 per share

- 2024-10: $250.43 per share

- 2024-11: $275.85 per share

- 2024-12: $234.70 per share

- 2025-01: $255.30 per share

- 2025-02: $245.75 per share

- 2025-03: $236.85 per share

- 2025-04: $224.05 per share

- 2025-05: $247.12 per share

- 2025-06: $255.97 per share

- 2025-07: $278.00 per share

- 2025-08: $279.98 per share

- 2025-09: $300.41 per share

- 2025-10: $283.38 per share

- 2025-11: $292.09 per share

- 2025-12: $288.72 per share

- 2026-01: $291.24 per share

- 2026-02: $314.74 per share

- 2026-03: $287.00 per share

- 2026-04: $315.83 per share

- 2026-05: $304.96 per share

- 2026-06: $314.59 per share

- 2026-07: $335.48 per share

- 2026-08: $342.79 per share

- 2026-09: $309.00 per share

- 2026-10: $321.14 per share

## Annual estimated value (USD per share)

- FY2016: low $33.65 per share, central $37.94 per share, high $43.65 per share

- FY2017: low $49.70 per share, central $56.32 per share, high $65.14 per share

- FY2018: low $74.09 per share, central $93.90 per share, high $109.60 per share

- FY2019: low $93.14 per share, central $129.00 per share, high $151.11 per share

- FY2020: low $74.85 per share, central $84.67 per share, high $97.75 per share

- FY2021: low $116.70 per share, central $132.44 per share, high $153.41 per share

- FY2022: low $155.54 per share, central $199.91 per share, high $233.52 per share

- FY2023: low $105.69 per share, central $119.45 per share, high $137.78 per share

- FY2024: low $112.58 per share, central $135.37 per share, high $156.74 per share

- FY2025: low $113.52 per share, central $128.38 per share, high $148.17 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

Prior published observations retained from 2026-10-15T06:36:24.221Z where newer inputs omit a numeric field or fiscal period.

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/702165/000162828026006268/nsc-20251231.htm); period 2025-12-31, filed 2026-02-09.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.