(The following report appeared at NewRatings.com on March 23.)
NEW YORK — Analyst Thomas R Wadewitz of Bear Stearns upgrades Norfolk Southern (NSC) from “peer perform” to “outperform,” while raising his estimates for the company.
Shares of Norfolk Southern, a leading rail transportation company in the US, are currently trading at $20.54.
According to Bear Stearns’ research note published this morning, the demand environment for the company has been favorable at present. The analyst mentions that Norfolk Southern is poised to post strong volume and EPS growth in the forthcoming quarters on account of decreasing inflationary pressures in the US. The risk/reward ratio for the company’s stock is better than that of its peers at present, the analyst adds.
Bear Stearns mentions that Norfolk Southern’s share price depreciated recently despite the company’s strong operating performance and oil price hedges. However, the company’s stock performance is likely to be strong in the forthcoming quarters on account of the easing inflation and declining pension expenditure pressures, the analyst adds. Norfolk Southern is also expected to post significant cost savings in 2004, the analyst mentions.
The EPS estimates for 2004 and 2005 have been raised from $1.52 to $1.56 and from $1.72 to $1.80, respectively.