Is Norfolk Southern Corp. overvalued or undervalued?

As of 17 October 2025, the valuation grade for Norfolk Southern Corp. has moved from expensive to very expensive, indicating a significant shift in its perceived value. The company is currently overvalued, as evidenced by its P/E ratio of 19, which is higher than the industry average, and an EV to EBITDA ratio of 13.53, suggesting that investors are paying a premium for its earnings before interest, taxes, depreciation, and amortization. Additionally, the PEG ratio stands at a notably low 0.17, which typically indicates that the stock is undervalued relative to its growth rate; however, in this context, it reinforces the overvaluation narrative given the high absolute ratios.
In comparison to its peers, Norfolk Southern Corp. has a higher P/E ratio than CSX Corp. at 18.97, but lower than Union Pacific Corp. at 34.67, highlighting a mixed competitive landscape. The EV to EBITDA ratio of 13.53 is also more favorable than Union Pacific's 22.20 but less favorable than CSX's 12.04. Despite a strong year-to-date return of 23.47% compared to the S&P 500's 13.30%, the multi-year returns show a concerning trend, with a 3-year return of 32.26% against the S&P 500's 81.19%, suggesting that while the stock has performed well recently, it has lagged significantly over the longer term.