Overview

• U.S. freight railroad's Q2 revenue rose 11%, beating analyst expectations

• Adjusted EPS for Q2 rose 7% yr/yr and beat analyst expectations

• Adjusted income from railway operations rose 5%, but adjusted operating ratio worsened on higher fuel costs

Outlook

• Norfolk Southern says it is encouraged by demand trends heading into the second half of 2026

• Company says priorities for H2 2026 include safety, service reliability, and disciplined execution

Result Drivers

• VOLUME GROWTH - 4% increase in volume contributed to record Q2 revenue, per company

• FUEL SURCHARGES - Higher fuel surcharges accounted for six points of revenue growth, per company

• FUEL EXPENSES - Higher fuel expense added 110 basis points to operating ratio, offset in part by fuel surcharge revenue, per company

Company press release: ID:nPn2gSl0qa

Key Details

Metric	Beat/Miss	Actual	Consensus Estimate
Q2 Operating Revenue	Beat	$3.50 bln	$3.37 bln (16 Analysts)
Q2 Adjusted EPS	Beat	$3.52	$3.31 (20 Analysts)
Q2 EPS		$3.26

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 5 "strong buy" or "buy", 17 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the ground freight & logistics peer group is "buy."

• Wall Street's median 12-month price target for Norfolk Southern Corp is $341.00, about 3% above its July 22 closing price of $330.94

• The stock recently traded at 25 times the next 12-month earnings vs. a P/E of 23 three months ago

Reuters Recommended Reads

• July 23 - Union Pacific's quarterly profit rises on higher pricing, fuel surcharges

• July 22 - CSX second-quarter profit, revenue rises on intermodal demand

• July 22 - Wabtec beats Q2 sales, profit estimates; lifts results outlook

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