Norfolk Southern Corp (NYSE:NSC) reported weaker-than-expected fourth-quarter earnings on Friday, causing its shares to fall by 1.5%. The railway company reported a decline in fourth-quarter fiscal 2023 operating revenue of 5% year-over-year to $3.073 billion, falling short of the consensus estimate of $3.08 billion. Adjusted earnings per share (EPS) also came in lower than expected at $2.83, a 17% decrease compared to the previous year.
Looking ahead to 2024, Norfolk Southern anticipates revenue growth of approximately 3% year-over-year, with capital expenditure (CapEx) expected to remain flat at around $2.3 billion. The company’s President and CEO, Alan H. Shaw, commented on their outlook, stating that Norfolk Southern is entering the new year with positive momentum and a focus on driving further productivity gains and operational discipline through aggressive cost management.
Following the release of the quarterly results, several analysts made changes to their price targets for Norfolk Southern. Morgan Stanley reduced the price target from $185 to $175, downgrading the stock from Equal-Weight to Underweight. Stifel also lowered its price target from $250 to $233, while downgrading the stock from Buy to Hold. On the other hand, TD Cowen increased its price target on Norfolk Southern from $233 to $236, but downgraded the stock from Outperform to Market Perform.
Despite the disappointing quarterly results, Norfolk Southern remains optimistic about its future prospects. The company aims to continue focusing on cost management and operational efficiency to drive growth and improve profitability. Investors will be closely monitoring Norfolk Southern’s performance in the coming months to see if it can deliver on its revenue growth targets for 2024.
In conclusion, Norfolk Southern Corp reported weaker-than-expected earnings for the fourth quarter of fiscal 2023. The company experienced a decline in operating revenue and adjusted EPS, causing a decline in its stock price. However, Norfolk Southern remains positive about its future and plans to focus on productivity gains and cost management in the upcoming year. Analysts have adjusted their price targets accordingly, reflecting their outlook on the company’s performance. Investors will be watching closely to see if Norfolk Southern can achieve its revenue growth goals for 2024.
