Investing

BofA Securities Downgrades Norfolk Southern

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Fintel reports that on October 2, 2023, BofA Securities downgraded their outlook for Norfolk Southern (NYSE:NSC) from Buy to Neutral.

Analyst Price Forecast Suggests 29.67% Upside

As of August 31, 2023, the average one-year price target for Norfolk Southern is 255.36. The forecasts range from a low of 178.77 to a high of $292.95. The average price target represents an increase of 29.67% from its latest reported closing price of 196.93.

See our leaderboard of companies with the largest price target upside.

The projected annual revenue for Norfolk Southern is 12,807MM, an increase of 0.91%. The projected annual non-GAAP EPS is 14.25.

Norfolk Southern Declares $1.35 Dividend

On July 25, 2023 the company declared a regular quarterly dividend of $1.35 per share ($5.40 annualized). Shareholders of record as of August 4, 2023 received the payment on August 21, 2023. Previously, the company paid $1.35 per share.

At the current share price of $196.93 / share, the stock’s dividend yield is 2.74%.

Looking back five years and taking a sample every week, the average dividend yield has been 1.95%, the lowest has been 1.36%, and the highest has been 3.16%. The standard deviation of yields is 0.34 (n=235).

The current dividend yield is 2.33 standard deviations above the historical average.

Additionally, the company’s dividend payout ratio is 0.48. The payout ratio tells us how much of a company’s income is paid out in dividends. A payout ratio of one (1.0) means 100% of the company’s income is paid in a dividend. A payout ratio greater than one means the company is dipping into savings in order to maintain its dividend – not a healthy situation. Companies with few growth prospects are expected to pay out most of their income in dividends, which typically means a payout ratio between 0.5 and 1.0. Companies with good growth prospects are expected to retain some earnings in order to invest in those growth prospects, which translates to a payout ratio of zero to 0.5.

The company’s 3-Year dividend growth rate is 0.44%, demonstrating that it has increased its dividend over time.

What is the Fund Sentiment?

There are 2262 funds or institutions reporting positions in Norfolk Southern. This is a decrease of 61 owner(s) or 2.63% in the last quarter. Average portfolio weight of all funds dedicated to NSC is 0.29%, a decrease of 0.33%. Total shares owned by institutions decreased in the last three months by 0.72% to 194,487K shares. The put/call ratio of NSC is 1.19, indicating a bearish outlook.

What are Other Shareholders Doing?

Jpmorgan Chase holds 12,385K shares representing 5.46% ownership of the company. In it’s prior filing, the firm reported owning 10,725K shares, representing an increase of 13.40%. The firm increased its portfolio allocation in NSC by 10.18% over the last quarter.

Lazard Asset Management holds 8,365K shares representing 3.68% ownership of the company. In it’s prior filing, the firm reported owning 8,506K shares, representing a decrease of 1.69%. The firm increased its portfolio allocation in NSC by 176.42% over the last quarter.

VTSMX – Vanguard Total Stock Market Index Fund Investor Shares holds 7,105K shares representing 3.13% ownership of the company. In it’s prior filing, the firm reported owning 7,054K shares, representing an increase of 0.72%. The firm decreased its portfolio allocation in NSC by 0.60% over the last quarter.

Capital World Investors holds 5,504K shares representing 2.42% ownership of the company. In it’s prior filing, the firm reported owning 5,595K shares, representing a decrease of 1.66%. The firm decreased its portfolio allocation in NSC by 2.10% over the last quarter.

VFINX – Vanguard 500 Index Fund Investor Shares holds 5,420K shares representing 2.39% ownership of the company. In it’s prior filing, the firm reported owning 5,315K shares, representing an increase of 1.94%. The firm decreased its portfolio allocation in NSC by 1.21% over the last quarter.

Norfolk Southern Background Information
(This description is provided by the company.)

Norfolk Southern Corporation is one of the nation’s premier transportation companies. Its Norfolk Southern Railway Company subsidiary operates approximately 19,300 route miles in 22 states and the District of Columbia, serves every major container port in the eastern United States, and provides efficient connections to other rail carriers. Norfolk Southern is a major transporter of industrial products, including agriculture, forest and consumer products, chemicals, and metals and construction materials. In addition, the railroad operates the most extensive intermodal network in the East and is a principal carrier of coal, automobiles, and automotive parts.

This article originally appeared on Fintel

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