Could COVID-19 Drag Norfolk Southern’s Stock To $110?

Could COVID-19 Drag Norfolk Southern’s Stock To $110?

Despite around a 22% decline in Norfolk Southern's (NYSE: NSC) stock since the beginning of the year, at the current price of around $150, we believe that Norfolk Southern's stock could see a significant downside.. Even though Norfolk Southern's stock is up 8% since the end of 2017, this move has largely been driven by expansion in the P/E multiple, which surged 96% over this period.. We believe that given the current crisis, and its impact on Norfolk Southern's business, this will likely result in lower revenues and earnings for 2020, and the P/E multiple could see a 20% contraction.. The current coronavirus crisis will likely have a significant impact on Norfolk Southern's business, due to an overall decline in manufacturing, and lower consumer demand amid lockdown.. Lower oil prices led to around a 20% decline in benchmark natural gas prices as well, which will directly impact the demand for coal, one of the key business segments of Norfolk Southern.. We believe Norfolk Southern's Q1 results next week will confirm the hit to its revenue.. Led by MIT engineers and Wall Street analysts, Trefis (through its dashboards platform dashboards.trefis.com) helps you understand how a company's products, that you