(The Associated Press circulated the following on June 6.)
NEW YORK — Norfolk Southern Corp., which hosts an analyst meeting Wednesday, is likely to discuss its long-term prospects despite near-term volume pressures, an analyst said.
Shares closed at $57.97 Tuesday, and are up about 14 percent since early April, when billionaire investor Warren Buffett first disclosed his interest in the sector.
In mid-May, Buffett said in a filing his company, Berkshire Hathaway Inc., bought stakes in Norfolk Southern Corp. and Union Pacific Corp., on top of an already-disclosed holding in Burlington Northern Santa Fe Corp.
News of the high-profile investor’s interest offset a disappointing first-quarter earnings report. The company at the end of April said quarterly profit fell 7 percent, despite the railroad’s efforts to cut costs, with automakers and home builders shipping fewer parts and less building material.
JPMorgan Securities Inc. analyst Thomas R. Wadewitz ,in a client note, said the company’s long-term prospects look bright, while there are likely few reasons for shares to rise in the near-term.
“Soft transport demand and increased competition from truckload are near term pressures that are likely to continue,” he wrote. “At its upcoming analyst meeting, we expect NSC to provide increased visibility to how its strategy and key investments will position it for strong future growth within its intermodal business and modest growth in other segments.”
In the long term, the company’s capacity investments, solid network and service performance should point to volume growth, wrote Wadewitz, who has a “Neutral” rating on the shares.