NSC

Norfolk Southern (NSC) beat Q3 earnings expectations with $3.62 EPS and $3.53B in revenues, driven by 3% volume growth and a 125% surge in fuel surcharges. However, the company raised its 2026 operating expense forecast to $9B due to soaring fuel costs, causing operating margins to deteriorate 210 basis points. Operational metrics showed mixed results with declining train speeds and service compliance.

Norfolk Southern reported Q3 2026 revenue of $3.53 billion, up 13.6% year-over-year, beating consensus estimates by 1.8%. EPS of $3.62 exceeded the $3.48 estimate by 4.02%.

Most operational metrics met or slightly exceeded analyst expectations, with strong growth in intermodal (+21.1%), chemicals (+15.6%), and metals/construction (+15.2%) segments. The railway operating ratio of 67.4% came in slightly higher than the 66.1% estimate. The stock holds a Zacks Rank #3 (Hold) rating.

CSX Corporation trades at a premium valuation with a forward P/E of 21.61X versus industry average of 20.66X. While the stock has gained 29.5% YTD and management raised 2026 guidance for revenue growth, operating margins, and free cash flow, headwinds including rail network issues, coal market weakness, and macroeconomic concerns persist. Analysts recommend holding for current shareholders but advise new investors to wait for a better entry point, maintaining a Zacks Rank #3 (Hold) rating.