Norfolk Southern: Stuck In The Yard

Patrick Doyle7.35K FollowersFollow5ShareSavePlay(11min)Comment(1)SummaryNorfolk Southern Corporation delivered strong financials, with revenue up 1.2% and net income up 18% for the first nine months of 2025.NSC shares trade near the upper end of their historical valuation range and are priced for near perfection, raising significant downside risk.Market-implied perpetual growth of 7.75% for NSC appears overly optimistic given industry maturity and diminished productivity tailwinds.With a 1.83% dividend yield, NSC requires unsustainably high dividend growth to match the risk-free Treasury’s 4.12% yield; Treasuries are the superior risk-adjusted choice. sshepard/iStock Unreleased via Getty Images In my ongoing effort to find the best rail stock to invest in, I’m going to analyze Norfolk Southern Corporation (NSC) in the same way I recently reviewed its competitor, CSX Corporation (This article was written byPatrick Doyle7.35K FollowersFollowI'm a quant investment newsletter writer who marries fundamental analysis with the latest research in momentum. Over the past few years, I’ve developed a piece of software that helps me track the level of optimism and pessimism embedded in stock price. I seek to challenge the assumptions embedded in price by profitably exploiting the disconnect between what the market thinks and what is a likely outcome. I invest in those companies that have a greater than average chance of giving us all a surprise in the next few months.Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.