TD Cowen maintains Buy rating on Norfolk Southern, $379 price target

Union Pacific reported 6% higher freight volume and 1% fewer employees in Q3, with revenue up 15% to $7.2B and EPS up 16% to $3.49. Productivity improved 5%, and operating costs rose 4%. The company awaits regulatory approval for its merger with Norfolk Southern, targeting a 2027 close. CEO Jim Vena noted labor cost increases and hiring plans.

CSX, Union Pacific, and Norfolk Southern reported record Q3 revenue due to high diesel prices shifting freight to rail. CSX saw $4B revenue (+12% YoY), Union Pacific $7.2B (+15%), and Norfolk Southern $3.5B (+14%). Intermodal volume grew significantly, but pricing benefits await 2027 contract resets. Fuel surcharges drove revenue growth, with diesel prices nearing all-time highs.

Norfolk Southern reported a 14% year-over-year revenue increase to $3.53 billion in Q3, driven by higher fuel surcharges and volume growth. Operating expenses rose 19% to $2.38 billion, leading to a 5% increase in operating income. The company revised its 2026 adjusted operating expense outlook to $9 billion. Norfolk Southern and Union Pacific are awaiting regulatory approval for their planned merger.

JPMorgan raised its price target for Norfolk Southern from $318 to $323. The stock is currently trading at $338.23, up 3.09% over 5 days and 17.15% year-to-date. The adjustment comes amid a broader downturn in the industrials sector.

Norfolk Southern reported record Q3 revenue of $3.5B, up 14% YoY, with operating ratio at 67.4%. Revenue growth driven by volume increase and higher fuel surcharges. EPS rose 7% to $3.37. Adjusted EPS increased 10% to $3.62. CEO attributed demand growth to trucking constraints. According to the company, merger-related expenses and incident costs were excluded from adjusted figures.

Norfolk Southern reported record Q3 2026 revenue, driven by industrial demand and truck-to-rail conversions. The company improved safety and operational efficiency, increasing train length and weight. Management raised CapEx guidance to $2.1B and adjusted OpEx guidance to $9B, citing inflation and fuel costs. They discussed merger plans, labor costs, and long-term risks like autonomous trucking. The company also addressed intermodal growth and infrastructure access requests.