TD Newcrest Upgrades Norfolk Southern (NSC) to Buy; Franchise Seen as Well-Positioned

TD Newcrest upgraded Norfolk Southern (NYSE: NSC) from Hold to Buy with a price target of $92.00.

TD analyst says, "The rails are trading at an average multiple of 12.0x P/FTM EPS, which is just below the low-end of the group’s historical average valuation range of 12.3-15.7x P/FTM EPS (average of 14.0x), and roughly consistent with where the group’s valuation stood in April/May 2009 and in late-2002/early-2003; but above the lows of ~10x in early-2000 and 8-9x during the financial crisis. We would suggest that, at current levels, the rail stocks are pricing in some degree of downside risk to earnings."

"In our opinion, NSC benefits from a high-quality management team that has a
track record of consistent execution. The stock currently offers a dividend yield of 2.7%, which is the highest in the group."

For more ratings news on Norfolk Southern click here and for the rating history of Norfolk Southern click here.

Shares of Norfolk Southern closed at $69.19 yesterday.

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