Posted 3/30/2024, 2:59:53 PM
Norfolk Southern's High P/E Ratio Justified by Expected Earnings Growth, Analysts Say
- Norfolk Southern's P/E ratio is high at 31.6x compared to other companies, suggesting potential overvaluation
- Earnings have been very inconsistent recently, with a 42% decrease last year erasing previous gains
- Analysts forecast strong 23% annual EPS growth over the next 3 years, much higher than the market's 10%
- High P/E ratio seems justified by expected high future earnings growth
- Risk of earnings deterioration not seen as large enough to warrant lower P/E ratio currently