Norfolk Southern Corp
Morningstar Rating for Stocks | Fair Value | Economic Moat | Capital Allocation |
---|---|---|---|
$563.00 | Rpp | Xrzdkrwp |
Norfolk Southern on Track for Margin Progress in 2024
Business Strategy and Outlook
From the start of the rail renaissance in 2004 through 2008, Norfolk Southern posted the highest margins among US Class I railroads. Its operating ratio (expenses/revenue) deteriorated in 2009 during the great recession, and remained stuck between 69% and 73% from 2010 to 2015. This fell short of progress made by Union Pacific and Canadian Pacific, which lack Norfolk's exposure to Appalachian coal. However, by 2017 Norfolk was back on track, improving to an adjusted 60.1% OR in 2021 as it bolstered pricing execution and adopted precision railroading principles, which have yielded more efficient use of locomotive assets and labor.