What Happened?

Shares of freight transportation company Norfolk Southern (NYSE:NSC) jumped 5.5% in the afternoon session after the company reported third-quarter results that blew past analysts' EPS expectations, mostly due to the sales of two railway lines and an insurance reimbursement related to last year's East Palestine, Ohio incident. Similarly, EBITDA outperformed Wall Street's estimates. On the other hand, its revenue unfortunately missed. Overall, we think this was a solid quarter with some important developments for the business that the market appreciates despite a topline miss.

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What The Market Is Telling Us

Norfolk Southern Corporation’s shares are not very volatile and have only had 3 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business. 

The biggest move we wrote about over the last year was 3 months ago when the stock gained 12.2% on the news that the company reported second-quarter earnings results that exceeded analysts' revenue expectations by a small amount but exceeded EPS expectations by a convincing amount. Overall, this quarter seemed strong and shareholders should feel optimistic.

Norfolk Southern Corporation is up 11.2% since the beginning of the year, and at $262.01 per share, it is trading close to its 52-week high of $263.13 from March 2024. Investors who bought $1,000 worth of Norfolk Southern Corporation’s shares 5 years ago would now be looking at an investment worth $1,387.

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