Cowen Raises Norfolk Southern’s PT On 3Q Outlook


On October 8, Cowen & Co. lifted the price target on Norfolk Southern’s (NSC) stock to $221 (1.9% upside potential) from $208 and maintained a Buy rating after the railroad company pre-announced its 3Q results.

On Oct. 7, Norfolk Southern announced that it anticipates 3Q operating revenue of $2.5 billion, in-line with the Street consensus of $2.495 billion. The company expects adjusted EBIT of $933 million, adjusted railway operating expenses of $1.57 billion and an adjusted operating ratio of 62.5%. The company is set to report 3Q results on Oct. 28. (See NSC stock analysis on TipRanks)

Cowen analyst Jason Seidl raised his 2020 and 2021 EPS estimates to $9.02 and $11.35, from $8.80 and $11.25, respectively, after the company’s 3Q sales beat his estimate of $2.4 billion. Its adjusted EBIT also came ahead of Seidl’s estimate of $846 million. The analyst is also positive on the company’s “cost efforts in the quarter even as volumes recovered.”

Currently, the Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus is based on 10 Buys, 5 Holds and 3 Sells. The average price target of $219.47 implies upside potential of about 1.2% to current levels. Shares have risen by about 11.7% year-to-date.

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