Common Stock Valuation Ratios (Price Multiples)
Valuation ratios measure the quantity of an asset or flaw (e.g., earnings) associated with ownership of a specified claim (e.g., a share of ownership of the enterprise).
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Norfolk Southern Corp. pages available for free this week:
- Income Statement
- Statement of Comprehensive Income
- Common-Size Income Statement
- Common-Size Balance Sheet: Assets
- Analysis of Short-term (Operating) Activity Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Selected Financial Data since 2005
- Debt to Equity since 2005
- Price to Earnings (P/E) since 2005
- Price to Operating Profit (P/OP) since 2005
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Current Valuation Ratios
Norfolk Southern Corp., current price multiples
| Norfolk Southern Corp. | FedEx Corp. | Uber Technologies Inc. | Union Pacific Corp. | United Airlines Holdings Inc. | United Parcel Service Inc. | Transportation | Industrials | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||
| Current share price (P) | |||||||||||
| No. shares of common stock outstanding | |||||||||||
| Growth rate (g) | |||||||||||
| Earnings per share (EPS) | |||||||||||
| Next year expected EPS | |||||||||||
| Operating profit per share | |||||||||||
| Sales per share | |||||||||||
| Book value per share (BVPS) | |||||||||||
| Valuation Ratios (Price Multiples) | |||||||||||
| Price to earnings (P/E) | |||||||||||
| Price to next year expected earnings | |||||||||||
| Price-earnings-growth (PEG) | |||||||||||
| Price to operating profit (P/OP) | |||||||||||
| Price to sales (P/S) | |||||||||||
| Price to book value (P/BV) | |||||||||||
Based on: 10-K (reporting date: 2021-12-31).
If the company price multiple is lower then the price multiple of benchmark then company stock is relatively undervalued.
Otherwise, if the company price multiple is higher then the price multiple of benchmark then company stock is relatively overvalued.
Historical Valuation Ratios (Summary)
Norfolk Southern Corp., historical price multiples
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Price to earnings (P/E) | ||||||
| Price to operating profit (P/OP) | ||||||
| Price to sales (P/S) | ||||||
| Price to book value (P/BV) |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
- Price to Earnings (P/E) Ratio
- The Price to Earnings ratio demonstrated an overall upward trend from 2017 to 2020, rising from 7.28 to a peak of 30.73. This indicates an increasing market valuation relative to earnings over this period. However, in 2021, the P/E ratio declined to 21.58, suggesting a partial adjustment downward, though it remained significantly above the 2017 level.
- Price to Operating Profit (P/OP) Ratio
- The Price to Operating Profit ratio also showed an increasing trend from 2017 through 2020, moving from 10.98 to 20.61. This rise indicates that the market was assigning a higher multiple to operating profits over these years. In 2021, the ratio decreased to 14.58, marking a notable reduction but still remaining higher than values from 2017 to 2019.
- Price to Sales (P/S) Ratio
- The Price to Sales ratio consistently increased over the five-year period, starting at 3.73 in 2017 and rising steadily each year to a maximum of 6.32 in 2020. Although there was a slight decline to 5.82 in 2021, the ratio remained elevated compared to the initial year, indicating growing market valuation relative to sales.
- Price to Book Value (P/BV) Ratio
- The Price to Book Value ratio followed a clear upward trajectory, moving from 2.41 in 2017 to 4.75 in 2021. This consistent increase implies a rising market premium over the book value, signifying investor confidence in the company’s asset value and overall prospects.
Price to Earnings (P/E)
Norfolk Southern Corp., historical P/E calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Net income (in millions) | ||||||
| Earnings per share (EPS)2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/E ratio4 | ||||||
| Benchmarks | ||||||
| P/E Ratio, Competitors5 | ||||||
| FedEx Corp. | ||||||
| Uber Technologies Inc. | ||||||
| Union Pacific Corp. | ||||||
| United Airlines Holdings Inc. | ||||||
| United Parcel Service Inc. | ||||||
| P/E Ratio, Sector | ||||||
| Transportation | ||||||
| P/E Ratio, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 Data adjusted for splits and stock dividends.
2 2021 Calculation
EPS = Net income ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Norfolk Southern Corp. Annual Report.
4 2021 Calculation
P/E ratio = Share price ÷ EPS
= ÷ =
5 Click competitor name to see calculations.
- Share Price Trend
- The share price exhibited a consistent upward trend over the five-year period. Starting at $138.61 at the end of 2017, it increased steadily each year to reach $270.42 by the end of 2021, which represents a near doubling in value. This suggests growing market confidence or positive performance expectations over time.
- Earnings Per Share (EPS) Trend
- The EPS showed considerable volatility throughout the period. It started relatively high at $19.03 in 2017, then experienced a sharp decline in 2018 to $9.97. From 2018 to 2019, EPS marginally improved to $10.56 but declined again in 2020 to $7.99. A recovery occurred in 2021, with EPS rising to $12.53, though it remained below the initial 2017 level. This pattern indicates fluctuating profitability and potential operational challenges or market conditions affecting earnings.
- Price-to-Earnings Ratio (P/E) Analysis
- The P/E ratio showed a notable increase from 7.28 at the end of 2017 to a peak of 30.73 in 2020. This sharp rise indicates the market priced the shares more optimistically relative to earnings, possibly reflecting expectations of future growth or recovery. However, the P/E ratio decreased in 2021 to 21.58, aligning with the EPS improvement but still elevated compared to earlier years. The fluctuations reflect shifting investor sentiment in response to earnings volatility and overall market conditions.
- Overall Insights
- The data reveals that despite declines and variability in earnings per share, the share price consistently rose, indicating strong investor confidence or external factors influencing the stock price positively. The P/E ratio's variations suggest that the market's valuation metrics were responsive to underlying earnings performance but also speculative elements. The recovery in EPS in 2021 amid high share prices and P/E ratios points to some improvement in financial health after prior challenges.
Price to Operating Profit (P/OP)
Norfolk Southern Corp., historical P/OP calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Income from railway operations (in millions) | ||||||
| Operating profit per share2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/OP ratio4 | ||||||
| Benchmarks | ||||||
| P/OP Ratio, Competitors5 | ||||||
| FedEx Corp. | ||||||
| Uber Technologies Inc. | ||||||
| Union Pacific Corp. | ||||||
| United Airlines Holdings Inc. | ||||||
| United Parcel Service Inc. | ||||||
| P/OP Ratio, Sector | ||||||
| Transportation | ||||||
| P/OP Ratio, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 Data adjusted for splits and stock dividends.
2 2021 Calculation
Operating profit per share = Income from railway operations ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Norfolk Southern Corp. Annual Report.
4 2021 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= ÷ =
5 Click competitor name to see calculations.
- Share price
- The share price exhibited a consistent upward trend over the five-year period, increasing from $138.61 at the end of 2017 to $270.42 at the end of 2021. This reflects a notable appreciation in market value, with the most significant year-on-year increase occurring between 2019 and 2020.
- Operating profit per share
- Operating profit per share showed a general upward trajectory from 2017 through 2019, climbing from $12.63 to a peak of $15.47. However, there was a decline in 2020 to $11.92, likely influenced by external or operational challenges during that year. The operating profit per share rebounded strongly in 2021, reaching $18.55, the highest level in the five-year span.
- P/OP ratio (Price to Operating Profit per Share)
- The P/OP ratio increased steadily from 10.98 in 2017 to 13.75 in 2019, indicating that the share price growth outpaced the increase in operating profit per share during this period. In 2020, the ratio spiked significantly to 20.61, which may reflect market optimism or a lag in profit recovery relative to share price. The ratio then decreased in 2021 to 14.58, suggesting a partial normalization as operating profit per share rose sharply, improving valuation metrics.
Price to Sales (P/S)
Norfolk Southern Corp., historical P/S calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Railway operating revenues (in millions) | ||||||
| Sales per share2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/S ratio4 | ||||||
| Benchmarks | ||||||
| P/S Ratio, Competitors5 | ||||||
| FedEx Corp. | ||||||
| Uber Technologies Inc. | ||||||
| Union Pacific Corp. | ||||||
| United Airlines Holdings Inc. | ||||||
| United Parcel Service Inc. | ||||||
| P/S Ratio, Sector | ||||||
| Transportation | ||||||
| P/S Ratio, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 Data adjusted for splits and stock dividends.
2 2021 Calculation
Sales per share = Railway operating revenues ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Norfolk Southern Corp. Annual Report.
4 2021 Calculation
P/S ratio = Share price ÷ Sales per share
= ÷ =
5 Click competitor name to see calculations.
- Share Price Trend
- The share price exhibited a consistent upward trajectory over the analyzed period. Starting at $138.61 at the end of 2017, it increased steadily each year, reaching $270.42 by the end of 2021. This represents an overall growth of approximately 95%, indicating strong market appreciation and investor confidence.
- Sales per Share Analysis
- Sales per share showed moderate fluctuations during the period. From $37.15 in 2017, it increased to a peak of $43.81 in 2019 before declining to $38.86 in 2020. Subsequently, it rebounded significantly to $46.47 in 2021, marking the highest value in the five-year span. This pattern suggests some volatility in sales performance, with a notable recovery in the most recent year.
- Price-to-Sales (P/S) Ratio Evaluation
- The P/S ratio indicated a generally rising trend from 3.73 in 2017 to a peak of 6.32 in 2020, followed by a slight decline to 5.82 in 2021. This upward movement reflects an increasing valuation multiple over time, implying that investors were willing to pay more per dollar of sales, particularly during 2020. The minor reduction in 2021 may suggest a stabilization or a reassessment of growth expectations.
- Overall Insights
- The combination of increasing share price and fluctuating sales per share, alongside a rising but slightly tapering P/S ratio, suggests that market optimism grew substantially over the five years. The recovery in sales per share in the final year likely contributed to sustaining investor confidence, mitigating the potential concerns signaled by the dip in 2020. The data points to a company viewed as increasingly valuable, with some variability in underlying sales performance.
Price to Book Value (P/BV)
Norfolk Southern Corp., historical P/BV calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Stockholders’ equity (in millions) | ||||||
| Book value per share (BVPS)2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/BV ratio4 | ||||||
| Benchmarks | ||||||
| P/BV Ratio, Competitors5 | ||||||
| FedEx Corp. | ||||||
| Uber Technologies Inc. | ||||||
| Union Pacific Corp. | ||||||
| United Airlines Holdings Inc. | ||||||
| United Parcel Service Inc. | ||||||
| P/BV Ratio, Sector | ||||||
| Transportation | ||||||
| P/BV Ratio, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 Data adjusted for splits and stock dividends.
2 2021 Calculation
BVPS = Stockholders’ equity ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Norfolk Southern Corp. Annual Report.
4 2021 Calculation
P/BV ratio = Share price ÷ BVPS
= ÷ =
5 Click competitor name to see calculations.
The financial data reveals several important trends in share price, book value per share (BVPS), and the price-to-book value ratio (P/BV) for the analyzed periods from 2017 to 2021.
- Share Price
- The share price exhibited a steady upward trend throughout the five-year period. Starting at $138.61 in 2017, it increased consistently each year, reaching $270.42 by the end of 2021. This reflects nearly a doubling of the share price over the period, which may indicate growing investor confidence or improving market perceptions of the company's value.
- Book Value per Share (BVPS)
- The BVPS remained relatively stable across the analyzed years, starting at $57.60 in 2017 and ending slightly lower at $56.89 in 2021. The value fluctuated marginally but showed no significant growth, with values hovering between approximately $57 and $59 during this period. This stability suggests that the company's net asset value per share did not undergo substantial changes despite the rise in share price.
- Price-to-Book Value Ratio (P/BV)
- The P/BV ratio demonstrated a continuous upward trajectory, increasing from 2.41 in 2017 to 4.75 in 2021. This rising ratio indicates that the market prices the company's stock at a larger premium relative to its book value per share over time. The steepening trend suggests heightened investor expectations or perceived improvement in intangible assets, growth prospects, or return potential beyond the company's tangible book value.
In summary, while the book value per share maintained a generally steady pattern, the share price nearly doubled, accompanied by a significant increase in the price-to-book ratio. This divergence suggests that market valuation grew disproportionately relative to the company's book equity, possibly reflecting enhanced market sentiment, growth anticipation, or other factors not captured by book value alone.