Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of A-. The company's strengths can be seen in multiple areas, such as its increase in net income, attractive valuation levels, increase in stock price during the past year, growth in earnings per share and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows low profit margins.
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Highlights from the ratings report include:
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Road & Rail industry average. The net income increased by 9.8% when compared to the same quarter one year prior, going from $410.00 million to $450.00 million.
- The stock price has risen over the past year, but, despite its earnings growth and some other positive factors, it has underperformed the S&P 500 so far. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- NORFOLK SOUTHERN CORP has improved earnings per share by 14.6% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, NORFOLK SOUTHERN CORP reported lower earnings of $5.37 versus $5.47 in the prior year. This year, the market expects an improvement in earnings ($5.60 versus $5.37).
- NSC, with its decline in revenue, slightly underperformed the industry average of 1.5%. Since the same quarter one year prior, revenues slightly dropped by 1.8%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
Norfolk Southern Corporation engages in the rail transportation of raw materials, intermediate products, and finished goods in the United States. Norfolk Southern has a market cap of $24.5 billion and is part of the services sector and transportation industry. The company has a P/E ratio of 14.00, below the S&P 500 P/E ratio of 18.00. Shares are up 25.9% year to date as of the close of trading on Thursday.
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--Written by a member of TheStreet Ratings Staff.
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