Is Norfolk Southern Corp. overvalued or undervalued?

As of 29 July 2025, the valuation grade for Norfolk Southern Corp. has moved from expensive to very expensive, indicating a significant increase in perceived overvaluation. The company is considered overvalued based on its current metrics, with a P/E ratio of 19, a Price to Book Value of 4.25, and an EV to EBITDA ratio of 13.53. In comparison, Union Pacific Corp. has a higher P/E of 34.67, while CSX Corp. shows a lower P/E of 18.97, reinforcing Norfolk Southern's elevated valuation relative to its peers.
Despite a solid return of 20.44% year-to-date, which outperformed the S&P 500's 12.22%, the long-term performance shows a concerning trend, with a 5-year return of 27.89% compared to the S&P 500's 96.61%. This suggests that while the stock has performed well recently, its valuation appears stretched when considering both its ratios and longer-term performance against the benchmark.