Norfolk Southern stock price target raised to $305 from $290 at BofA

Investing.com - BofA Securities raised its price target on Norfolk Southern (NYSE:NSC) to $305 from $290 while maintaining a Buy rating on the railroad operator’s stock. The railroad giant, currently trading at $260.32 with a market cap of $58.7 billion, has seen its stock rise about 12% year-to-date.

The price target increase represents a shift from BofA’s previous valuation model, moving from 20.0x to 21.0x the firm’s 2026 earnings per share estimate for Norfolk Southern as the firm rolls forward its target multiple past mid-year. According to InvestingPro data, 15 analysts have recently revised their earnings estimates upward for the upcoming period, with the stock currently trading at a P/E ratio of 17.75x.

BofA cited "increased potential for M&A discussions to drive valuation interest in US railroads higher" as a key factor behind the price target adjustments for both Norfolk Southern and its eastern peer CSX (NASDAQ:CSX).

The firm also upgraded CSX to Buy from Neutral and increased its price objective on that stock to $42 from $34, based on a 21.5x multiple on its 2026 EPS estimate, representing the top of the 18.5x-21.5x five-year one standard deviation trading range of the Class 1 rail group.

For Norfolk Southern specifically, BofA reiterated its Buy rating while implementing the higher price target, positioning the stock within its broader positive outlook on the U.S. railroad sector.

In other recent news, Norfolk Southern Corporation has announced the outcomes of its 2025 Annual Meeting of Shareholders. Shareholders elected thirteen directors to serve one-year terms and ratified KPMG LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2025. Additionally, the executive compensation proposal was approved on an advisory basis. Meanwhile, UBS analysts maintained a Buy rating on Norfolk Southern, with a price target of $275, citing management’s confidence in achieving $150 million in cost savings by 2025. However, they noted potential challenges due to tariffs and volatility in the auto segment. In contrast, Goldman Sachs downgraded Norfolk Southern from Buy to Neutral, maintaining a price target of $278, and highlighted risks such as slower macroeconomic growth and challenges in the automotive and coal sectors. Citi also downgraded the company to Neutral, raising concerns about elevated valuations in the transportation sector. Furthermore, Norfolk Southern announced the resignation of Chairman Claude Mongeau, with a new chair to be elected at the next board meeting.

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