Norfolk Southern Corporation (NSC) — Fundamental Analysis & Key Financial Ratios

Kaplio's reading: Norfolk Southern Corporation

Updated on October 23, 2026 · accounts published on October 22, 2026

A high-margin business whose returns on capital lag the sector

Norfolk Southern trades at a P/E of 28.7 over the last 12 months, 31 % above its ten-year median of 21.8 and higher than in 78 % of the past decade.

• Is Norfolk Southern expensive or cheap? Its P/E of 28.7 is 31 % above its ten-year median of 21.8 and higher than in 78 % of the past decade.
• How is the business doing? Over the last 12 months revenue grew 0.5 % while EPS rose 10 %, and the operating margin held close to its decade average.
• How strong is the balance sheet? Net debt was $72.73 per share in fiscal 2025, about 21 % of the share price and 2.7× EBITDA, under the 3.0× healthy ceiling.
• What to expect from the next earnings? Results are due February 4, 2027, with analysts expecting EPS of $3.20 after beats in 7 of the last 8 quarters.
• Does Norfolk Southern turn its margin into cash, and what multiple of the cycle does it trade at? Free cash flow was 75 % of net income in fiscal 2025, short of the 85 % industrials need, while capex took 18 % of revenue.

Is Norfolk Southern expensive or cheap?

Over the last 12 months Norfolk Southern trades at a P/E of 28.7. That is 31 % above its ten-year median of 21.8, within a decade range of 12.0 to 37.7, and 11 % above the sector median of 25.8. Its EV/EBITDA is 16.5. Industrials are measured against their own averages, here 23.5 for P/E over ten fiscal years and 14.1 for EV/EBITDA over seven. Both multiples sit above the 110 % mark that flags a stretched reading. The stock has gained 24 % in 12 months and trades 3 % below its 52-week high of $352.98. Investors are paying for earnings growth that revenue has not delivered yet.

How is the business doing?

Revenue barely moved over the last 12 months, up 0.5 %, yet EPS climbed 10 %, so profit is growing much faster than sales. The operating margin of 31.5 % is close to the 32.5 % average for fiscal 2014-2025 and to the 32.9 % of fiscal 2025, so margins are holding near their long-run level. The weak spot is return on capital. ROIC of 7.5 % over the last 12 months is 1.5 points below the sector median of 9.0 %. It topped 10 % in only 2 of the last 10 fiscal years, with a low of 5.7 % in 2023. Revenue per share did better, growing 7.1 % a year in fiscal 2020-2025.

How strong is the balance sheet?

At the end of fiscal 2025, net debt stood at $72.73 per share ($79.53 of debt against $6.81 of cash). That is about 21 % of the share price and 2.7× EBITDA, just inside the 3.0× ceiling considered healthy for industrials. Over the last 12 months, debt to equity of 0.99 and a current ratio of 0.90 show a business that relies on the cash it generates more than on cash in hand. The Altman Z of 2.3 sits in the grey zone between 1.81 and 2.99. The dividend has risen for 11 consecutive fiscal years, with a 42 % payout in fiscal 2025 and a 1.6 % yield over the last 12 months.

What to expect from the next earnings?

On October 22, 2026, Norfolk Southern reported EPS of $3.62 against $3.46 expected, a 4.6 % beat, and it has topped estimates in 7 of the last 8 quarters. For the next quarter analysts expect $3.20, with results due on February 4, 2027. Over the last 30 days the 2026 EPS consensus slipped 0.8 %, from $12.98 to $12.88 across 12 analysts, while the revenue consensus rose 0.8 %, so forecasts are moving sideways. Of the 48 analysts covering the company, 21 rate it a buy, 24 a hold and 3 a sell. That split leans cautious.

Does Norfolk Southern turn its margin into cash, and what multiple of the cycle does it trade at?

Industrials are semi-cyclical, so the tests that count are operating margin, cash conversion and the multiple paid across a full cycle. Norfolk Southern passes the first easily, with a 33 % operating margin in fiscal 2025 against a 12 % healthy threshold. Cash is where it falls short. Free cash flow covered 75 % of net income in fiscal 2025, below the 85 % benchmark, and capex absorbed 18 % of revenue, far above the 4 % to 8 % range considered healthy. ROIC of 7.5 % is half the 15 % the sector treats as healthy. Across the cycle, EV/EBITDA of 16.5 is 26 % above its seven-year average of 14.1.

How this was prepared: the data comes from companies' official filings, collected by a professional provider, and from Kaplio's analysis engine (trailing-12-month ratios, 10 years of history and sector medians computed across US-listed companies). The text is written from that data alone, every figure is checked against it before publication, and it is reviewed when the company reports results. This is not investment advice.