MMarketMath

NSC

Slow growerQuality: Medium (67/100)1 red flag

Norfolk Southern · Industrials · Rail Transportation

$352.98

52w 268.23 – 358.60

20y monthly, adjusted

Mkt cap

$79.3B

P/E

27.6

P/FCF

36.8

FCF yield

2.7%

ROE

18.5%

Shldr yield

2.2%

div 1.5% + bb 0.7%

What today's price assumes

At $79.3B, the market is pricing in 16.0% annual free-cash-flow growth for the next decade (10% discount rate, 2.5% terminal growth). Over the last ten years, FCF actually grew 15.2% per year — expectations are roughly in line with history.

Simple DCF per-share range: $146 · $328 · $416 (4% / base / optimistic growth). An estimate, not a target.

Adjust the assumptions yourself →

Historical multiple lens

At its own median P/OCF of 11.4× across 15 years, NSC would trade near $220/share (25th–75th percentile: $147–$274); it trades at 18.2× today.

Assumes the historical multiple regime persists — re-ratings can be permanent.

Growth record

Compound annual growth rates from as-filed 10-K data, split-adjusted

Rev 3y

−1.5%

Rev 5y

+4.5%

Rev 10y

+1.5%

EPS 5y

+10.2%

EPS 10y

+9.6%

FCF 5y

+0.1%

FCF 10y

+15.2%

Fundamentals

Fiscal 2007–2025, from SEC filings

Revenue

2007: $9.4B
2008: $10.7B
2009: $8.0B
2010: $9.5B
2011: $11.2B
2012: $11.0B
2013: $11.2B
2014: $11.6B
2015: $10.5B
2016: $9.9B
2017: $10.6B
2018: $11.5B
2019: $11.3B
2020: $9.8B
2021: $11.1B
2022: $12.7B
2023: $12.2B
2024: $12.1B
2025: $12.2B
$0$5.0B$10.0B
07
11
15
19
23

Net income

2007: $1.5B
2008: $1.7B
2009: $1.0B
2010: $1.5B
2011: $1.9B
2012: $1.7B
2013: $1.9B
2014: $2.0B
2015: $1.6B
2016: $1.7B
2017: $5.4B
2018: $2.7B
2019: $2.7B
2020: $2.0B
2021: $3.0B
2022: $3.3B
2023: $1.8B
2024: $2.6B
2025: $2.9B
$0$2.0B$4.0B
07
11
15
19
23

Free cash flow

2007: $992.0M
2008: $1.2B
2009: $561.0M
2010: $1.2B
2011: $1.1B
2012: $824.0M
2013: $1.1B
2014: $734.0M
2015: $523.0M
2016: $1.1B
2017: $1.5B
2018: $1.8B
2019: $1.9B
2020: $2.1B
2021: $2.8B
2022: $2.3B
2023: $852.0M
2024: $1.7B
2025: $2.2B
$0$1.0B$2.0B
07
11
15
19
23

Diluted shares (lower is better)

2008: 380.0M
2009: 372.1M
2010: 371.8M
2014: 312.5M
2015: 304.4M
2016: 296.0M
2017: 290.3M
2018: 280.2M
2019: 265.6M
2020: 256.6M
2021: 248.1M
2022: 235.6M
2023: 227.4M
2024: 226.4M
2025: 225.3M
0100.0M200.0M300.0M
07
11
15
19
23

Margins

20%40%07101316192225
Net marginFCF marginGross margin

Capital returned (dividends + buybacks)

2007: $377.0M
2008: $1.6B
2009: $500.0M
2010: $1.4B
2011: $2.6B
2012: $1.9B
2013: $1.3B
2014: $1.0B
2015: $1.8B
2016: $1.5B
2017: $1.7B
2018: $3.6B
2019: $3.0B
2020: $2.4B
2021: $4.4B
2022: $4.3B
2023: $1.8B
2024: $1.2B
2025: $1.7B
$0$2.0B$4.0B
07
11
15
19
23

Cash vs long-term debt

$0$5.0B$10.0B$15.0B07101316192225
CashLT debt

Quarterly

Discrete quarters from 10-Q filings; Q4 derived as fiscal year minus Q1–Q3. OCF is unwound from the year-to-date figures 10-Qs report. Compare to the same quarter a year ago — most businesses are seasonal.

Revenue by quarter

Q2'23: $3.0B
Q3'23: $3.0B
Q4'23: $3.1B
Q1'24: $3.0B
Q2'24: $3.0B
Q3'24: $3.1B
Q4'24: $3.0B
Q1'25: $3.0B
Q2'25: $3.1B
Q3'25: $3.1B
Q4'25: $3.0B
Q1'26: $3.0B
Q2'26: $3.5B
$0$1.0B$2.0B$3.0B
23
24
24
25
26

Net income by quarter

Q2'23: $356.0M
Q3'23: $478.0M
Q4'23: $527.0M
Q1'24: $53.0M
Q2'24: $737.0M
Q3'24: $1.1B
Q4'24: $733.0M
Q1'25: $750.0M
Q2'25: $768.0M
Q3'25: $711.0M
Q4'25: $644.0M
Q1'26: $547.0M
Q2'26: $734.0M
$0$500.0M$1.0B
23
24
24
25
26
QuarterRevenueYoYNet incomeYoYEPSOCF
Q2'26$3.5B+11.4%$734.0M−4.4%3.26$1.1B
Q1'26$3.0B+0.2%$547.0M−27.1%2.43$344.0M
Q4'25 *$3.0B−1.7%$644.0M−12.1%2.87$1.1B
Q3'25$3.1B+1.7%$711.0M−35.3%3.16$1.3B
Q2'25$3.1B+2.2%$768.0M+4.2%3.41$1.1B
Q1'25$3.0B−0.4%$750.0M+1315.1%3.31$950.0M
Q4'24 *$3.0B−1.6%$733.0M+39.1%3.24$951.0M
Q3'24$3.1B+2.7%$1.1B+129.9%4.85$1.2B
Q2'24$3.0B+2.1%$737.0M+107.0%3.25$1.0B
Q1'24$3.0B−4.1%$53.0M−88.6%0.23$839.0M
Q4'23 *$3.1B−5.1%$527.0M−33.3%2.32$673.0M
Q3'23$3.0B−11.1%$478.0M−50.1%2.10$660.0M
Q2'23$3.0B−8.3%$356.0M−56.5%1.56$673.0M

Track record

Compound annual growth by period. For debt and share count, negative is the good direction.

Series3y5y10y15y
Revenue−1.5%+4.5%+1.5%+1.7%
Operating cash flow+1.1%+3.7%+4.1%+3.2%
Free cash flow−1.7%+0.1%+15.2%+3.7%
EPS (diluted)−2.8%+10.2%+9.6%+8.0%
Equity+6.9%+1.0%+2.5%+2.5%
LT debt+4.4%+6.4%+5.2%+6.0%
Diluted shares−1.5%−2.6%−3.0%−3.3%
Stock price+22.3%+9.0%+16.4%+14.2%

$100, 3 years ago

$183vs $176 in SPY

22.3% vs 20.7%/yr

$100, 5 years ago

$154vs $181 in SPY

9.0% vs 12.6%/yr

$100, 10 years ago

$458vs $412 in SPY

16.4% vs 15.2%/yr

$100, 15 years ago

$728vs $813 in SPY

14.2% vs 15.0%/yr

The $1 test — market value created per $1 of earnings retained (Buffett's hurdle: at least $1)

Last 5 years

$1.40

$10.8B created / $7.7B retained

Last 10 years

$2.65

$47.8B created / $18.1B retained

Quality & capital discipline

Cash-based returns and how management deploys capital

Cash ROIC

13.6%

OCF ÷ (equity + debt)

OCF / EV yield

4.6%

MC vs 10× OCF

1.82

≤1 = priced under 10× OCF

Debt / FCF

7.6y

SBC / FCF

2.9%

Owner earnings

$2.1B

OCF − capex − SBC

OE yield

2.6%

Share count 5y

−3.0%

per year; negative = buybacks

Capital intensity

299.5%

net PP&E ÷ revenue

Sales efficiency

$2.15

new PP&E per $1 new revenue, 5y

Growth engine (5y): reinvested 23.5% of operating cash flow at an incremental return of 15.3% — an organically fundable growth rate of about 3.6% per year (growth ≈ reinvestment rate × incremental ROIC).

Checklist

16 of 26 checks pass · 62%. Checks with structurally missing inputs are excluded.

Growth & Consistency

3/7

  • Revenue growth

    4.5% · 5y CAGR ≥ 5%

    fail

  • EPS growth

    10.2% · 5y CAGR ≥ 5%

    pass

  • FCF growth

    0.1% · 5y CAGR ≥ 5%

    fail

  • Revenue rises consistently

    5 of 9 · up in ≥ 7 of last 10 years

    fail

  • FCF consistently positive

    10 of 10 · positive in ≥ 8 of last 10 years

    pass

  • Profitable every year

    10 of 10 · net income > 0 in ≥ 8 of last 10

    pass

  • Cash flow keeps up with sales

    3.7% vs 4.5% · OCF CAGR ≥ 0.9× revenue CAGR

    fail

Profitability

6/6

  • Net margin

    23.6% · ≥ 8%

    pass

  • Operating margin

    35.8% · ≥ 10%

    pass

  • Gross margin stable or rising

    — · no drop > 2 pts over 3y

    na

  • Return on equity

    18.5% · ≥ 12%

    pass

  • Cash ROIC

    13.6% · ≥ 12%

    pass

  • FCF margin

    17.7% · ≥ 5%

    pass

  • Earnings back their cash

    OCF $4.4B vs NI $2.9B · OCF ≥ net income (latest FY)

    pass

Balance Sheet

2/5

  • Debt payable from cash flow

    7.6y · LT debt ≤ 3× FCF

    fail

  • Cash cushion

    9% · cash ≥ 50% of LT debt

    fail

  • Leverage

    1.06 · LT debt ≤ 1.5× equity

    pass

  • Equity positive and compounding

    $15.5B · equity > 0 and grew over ~5y

    pass

  • Interest burden

    18% · interest ≤ 15% of operating income

    fail

Capital Allocation

4/4

  • Share count flat or shrinking

    -3.0% · ≤ +0.5%/yr over ~5y

    pass

  • Stock comp restrained

    3% · SBC ≤ 15% of FCF

    pass

  • Distributions funded by FCF

    81% · dividends + buybacks ≤ 100% of FCF

    pass

  • Repurchases are a habit

    9 of 10 · buybacks in ≥ 5 of last 10 years

    pass

Valuation Discipline

1/4

  • FCF yield

    2.7% · ≥ 3%

    fail

  • Earnings multiple

    27.6 · P/E ≤ 25

    fail

  • Price asks less than history delivered

    16.0% vs 15.2% · implied FCF growth ≤ historical FCF CAGR

    fail

  • Shareholder yield

    2.2% · dividends + buybacks ≥ 2% of market cap

    pass

Red flags

Mechanical checks — a flag is a question to investigate, not a verdict

Heavy debt load

Long-term debt exceeds 5 years of free cash flow.

Financial data

As filed in 10-Ks; per-share figures split-adjusted. $ in millions.

FYRevenueGross profitOp incomeNet incomeEPSOCFCapExFCFDividendsBuybacksSBCCashLT debtEquityShares
202512,180—4,3562,87312.754,3612,2042,1571,215534631,53016,48015,547225
202412,123—4,0712,62211.574,0522,3811,6711,2210401,64116,65114,306226
202312,156—2,8511,8278.023,1792,3278521,225622401,56817,17512,781227
202212,745—4,8093,27013.884,2221,9482,2741,1673,1105345614,47912,733236
202111,142—4,4473,00512.114,2551,4702,7851,0283,3905483913,28713,641248
20209,789—3,0022,0137.843,6371,4942,1439601,439281,11512,10214,791257
201911,296—3,9892,72210.253,8922,0191,8739492,0995358011,88015,184266
201811,458—3,9592,6669.513,7261,9511,7758442,7814735810,56015,362280
201710,551—3,5225,40418.613,2531,7231,5307031,012456909,73616,359290
20169,888—3,0091,6685.623,0341,8871,1476958034295610,11212,409296
201510,511—2,8841,5565.102,9082,3855237131,075421,1019,89312,188304
201411,624—3,5752,0006.392,8522,118734687318449738,88512,408313
201311,245—3,2571,9106.043,0781,9711,107637627541,4439,34811,289—
201211,040—3,1241,7495.373,0652,2418246241,288456538,4829,760—
201111,172—3,2131,9165.453,2272,1601,0675762,051612767,4409,911—
20109,516—2,6761,4964.002,7141,4701,244514863678276,92510,669372
20097,969—1,9621,0342.761,8601,2995615000609967,05310,353372
200810,661—3,0841,7164.522,7151,5581,1574561,128—6186,1839,607380
20079,432—2,5851,4643.682,3331,341992377——206—9,727—

Some concepts are structurally absent for certain industries (banks report no gross profit or capex). Missing ≠ zero.

Compare with peers →·10-K filings on EDGAR ↗