Norfolk Southern Corporation (NSC) Stock Valuation — PE Analysis
Railroads · NYSE
Current Price
$309.98
PE Ratio (TTM)
26.1x
Intrinsic Value
$347.28
+10.7% margin of safety
COMPETITIVE MOAT
↑Network Density
NSC's extensive rail network across the Eastern U.S. creates significant barriers to entry. This dense infrastructure is difficult and costly for competitors to replicate.
↑High Switching Costs
Customers face substantial costs and operational disruptions when switching rail carriers. This locks in existing freight volume and provides pricing power.
↑Merger Synergies
The potential merger with Union Pacific, if approved, could unlock significant operational efficiencies and network expansion. This could lead to cost savings and improved service.
INVESTMENT RISKS
↓Regulatory Scrutiny
The proposed merger faces significant regulatory review by the STB. Delays or outright rejection could impact strategic growth and investor sentiment.
↓Operational Execution
The appointment of a new COO suggests a focus on operational improvements. Any missteps in execution could lead to service disruptions and financial impacts.
↓Market Volatility
The stock's recent 5.5% drop indicates sensitivity to market sentiment and broader economic cycles. Cyclical downturns can negatively affect freight volumes and profitability.
Base case
NSC base case PE valuation
A base case PE valuation for NSC estimates a fair value of about $347.28 per share, against a current price of $309.98. The model assumes 8.7% annual earnings growth, a 26x target PE multiple, and a 10% discount rate.
Intrinsic Value
$347.28
Margin of safety
+10.7%
Expected annual return
+2.3%
Base case assumptions: 8.7% annual earnings growth, 26x target PE, 10% discount rate, 5 year projection. Data as of 2026-06-15.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the NSC PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for Norfolk Southern Corporation respond.
Open PE Calculator for NSCCompany Overview
Norfolk Southern Corporation (NSC), operating through its various subsidiaries, is a prominent rail transport provider in the United States. The company's core business involves the conveyance of raw materials, semi-finished goods, and completed merchandise across the nation. Its extensive freight services cover a broad spectrum of commodities. This includes a variety of agricultural and forestry products like grains (e.g., soybeans, wheat, corn), fertilizers, animal feeds, and diverse foodstuffs such as oils, flour, sweeteners, beverages, and canned goods, alongside lumber and paper products. NSC also handles a wide range of chemicals, from sulfur and petroleum derivatives to chlorine compounds, plastics, industrial chemicals, and sand. Furthermore, the company moves metals and construction supplies, including steel, aluminum, heavy machinery, cement, aggregates, and specialized military equipment. Transportation of both finished motor vehicles and automotive components is a significant segment, as is the consistent shipment of coal. Beyond its principal freight operations, Norfolk Southern facilitates global trade by connecting with various Atlantic and Gulf Coast ports for overseas cargo. The corporation also manages an expansive intermodal network and offers commuter passenger rail services. As of the close of 2021, the company's vast railway infrastructure extended over roughly 19,300 route miles, serving 22 states and the District of Columbia. Norfolk Southern Corporation, originally incorporated in 1980, is based in Atlanta, Georgia.
Financial Metrics — NSC PE Stock Valuation Data
PE Ratio (TTM)
26.1x
PEG Ratio
n/m
Earnings Yield
3.83%
ROE (TTM)
17.4%
Revenue/Share (TTM)
$54.13
Dividend Yield
1.74%
Debt/Equity
1.08x
Frequently Asked Questions
What is the PE ratio of NSC?
The trailing twelve-month PE ratio of NSC reflects how much investors pay per dollar of Norfolk Southern Corporation's earnings. This metric is most useful when compared to Railroads peers and the company's own historical range.
Is NSC overvalued based on PE ratio?
NSC's PE of 26.1x combined with a PEG ratio of -1.37 provides a growth-adjusted perspective. NSC has negative earnings, so its PE and PEG ratios are not meaningful here and cannot tell you whether the stock is over or undervalued. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Railroads, a DCF analysis may be more appropriate.
How do I value NSC stock using PE ratio?
To value Norfolk Southern Corporation using PE: (1) Compare the current PE (26.1x) against the Railroads median to assess relative pricing, (2) check the PEG ratio (-1.37) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of NSC?
NSC's PEG ratio is -1.37, calculated by dividing the PE ratio (26.1x) by the expected earnings growth rate. Because NSC has negative earnings, its PEG ratio is not meaningful and should not be read as a sign of under or overvaluation. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for NSC stock valuation?
PE ratio gives a quick relative read — how NSC is priced versus Railroads peers. DCF provides an absolute value based on projected free cash flows. For NSC, with a strong ROE of 17.4%, both methods are worth using — PE for a market-relative check, DCF to stress-test whether fundamentals justify the price. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See NSC DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Industrials valuationsP/E and DCF value NSC with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-06-15. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.