Why Is Norfolk Southern Stock Taking A Hit Today?
Portfolio Pulse from Lekha Gupta
Norfolk Southern Corporation (NYSE:NSC) reported disappointing first-quarter FY24 financial results, with a 4% decline in railway operating revenue to $3.004 billion, missing consensus estimates. Adjusted EPS fell by 25% Y/Y to $2.49, below expectations. The company also highlighted a $600 million settlement related to the East Palestine derailment class action lawsuit. Despite these challenges, Norfolk Southern declared a quarterly dividend of $1.35 per share. NSC shares dropped 4.4% to $234.23. Exposure to NSC can also be gained through TCW Transform Supply Chain ETF (BATS:SUPP) and First Trust Nasdaq Transportation ETF (NASDAQ:FTXR).
April 24, 2024 | 5:13 pm
News sentiment analysis
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NEGATIVE IMPACT
First Trust Nasdaq Transportation ETF, holding NSC, might be indirectly affected by NSC's disappointing Q1 FY24 results and legal settlement.
Given FTXR's exposure to NSC, the ETF could face indirect negative impacts from NSC's financial underperformance and legal settlement, though its diversified nature may lessen the blow.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 50
NEGATIVE IMPACT
Norfolk Southern reported lower than expected Q1 FY24 results and a significant legal settlement, leading to a 4.4% drop in stock price.
The disappointing financial results and the impact of a $600 million legal settlement are likely to negatively affect investor sentiment and stock price in the short term.
CONFIDENCE 90
IMPORTANCE 90
RELEVANCE 100
NEGATIVE IMPACT
TCW Transform Supply Chain ETF, which includes NSC, may see indirect impact due to NSC's Q1 FY24 performance and legal settlement.
As an ETF that holds NSC, SUPP may experience some negative impact due to the poor performance and legal challenges faced by Norfolk Southern, though diversified holdings may mitigate overall effect.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 50