Analyst Turns Bullish on Norfolk Southern Stock

Thu., May 11, 2023 | Schaeffers Investment Research

J.P. Morgan Securities upgraded Norfolk Southern Corp (NYSE:NSC) to "overweight" from "neutral," and lifted its price target to $250 from $236. The brokerage cited improved service metrics, and noted that higher shipment prices helped the company meet revenue estimates for the first quarter, helping to offset the cost of the East Palestine and Ohio derailments.

Analysts are on the fence, with 19 of the 29 question calling Norfolk Southern stock a "hold." This leaves plenty of room for additional upgrades moving forward.

Options traders sway bullish. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), NSC's 10-day call/put volume ratio of 2.86 sits higher than 94% of annual readings, indicating calls have been getting picked up at quicker-than-usual clip.

It's worth noting the security's Schaeffer's Volatility Scorecard (SVS) of 84 out of 100 indicates it has exceeded option traders' volatility expectations during the past year -- a boon for buyers.

Last seen up 0.2% to trade at $208.89, Norfolk Southern stock staged a bounce off the $198 level in late April, which also contained its March pullback. Year-to-date, NSC is down 15.3%, as it contends with long-term overhead pressure from the 60-day moving average.

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