2024-07-10 12:56:00 ET
Summary
- Norfolk Southern could be the best railroad investment in the next few years.
- Improving operating ratio and strong performance in key commodities indicate a potential recovery for Norfolk.
- Despite recent challenges, Norfolk's true multiples may be lower than they appear, creating an interesting opportunity for investors.
Investing in railroads may not interest everyone. However, when we find a railroad whose odds to outperform the market are good, then most of us are willing to further understand the opportunity. As a matter of fact, Norfolk Southern ( NSC ) could be the best railroad in the next few years. Up until early 2022, it was the only railroad that constantly outperformed the S&P500 ( SPY ) together with its peer CSX Corporation ( CSX ). Then a bear market came, but while CSX has started trading upwards once again, Norfolk has been decoupling from its peer also because of the negative impact of the East Palestine, OH, derailment that occurred on February 3, 2023, driving $1.7 billion in extra costs related to the incident. It has only recently been found that an overheated wheel bearing on a hopper car was the cause of the whole catastrophe ....
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Turning Bullish On Norfolk Southern Ahead Of Earnings