On Thursday, TD Cowen made an adjustment to the share price target for Norfolk Southern Corporation (NYSE: NYSE:NSC), raising it to $253 from $236. The firm confirmed its Market Perform rating for the railroad company's stock. This adjustment follows a strategic executive hire and an optimistic operational forecast by the company.
Norfolk Southern has brought on board John Orr, previously of Canadian Pacific (NYSE:CP) Kansas City (CPKC), to serve as their Chief Operating Officer (COO) with immediate effect. TD Cowen acknowledged the significance of this high-profile addition to the executive team. The hiring, however, came at a substantial cost, including a $25 million cash compensation package for Orr and several operational concessions.
The company has also revised its second-half operating ratio (OR) guidance, which now surpasses consensus forecasts. Furthermore, Norfolk Southern provided long-term guidance that improves upon the previous long-term outlook by at least 140 basis points.
The analyst from TD Cowen expressed a positive outlook on these developments. Despite the considerable expense incurred to secure Orr's leadership, the updated guidance suggests a stronger performance trajectory for Norfolk Southern. The firm reiterated the Market Perform rating while acknowledging the potential for improved operational efficiency under the new COO's direction.
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