Using the PEG framework with analyst consensus forward EPS growth of 9.3% plus 1.9% dividend yield, Norfolk Southern Corporation has a fair value of $113.28 based on NTM EPS (FY2026) of $12.15. The current PEG ratio is 2.49.
PEG < 1 = bargain, 1–1.5 = fair, > 2 = expensive.
PEG tends to undervalue slow growers — consider dividend yield and asset value instead.
| EPS Growth RateForward | 7.4% |
| Dividend Yield | +1.9% |
| Adjusted Growth (clamped 8–25%) | 9.3% |
| Fair P/E | 9.3x |
| NTM EPS (FY2026) | $12.15 |
| Fair Value | $113.28 |
| Period | EPS Est. | Growth | Analysts |
|---|---|---|---|
| FY2025 (actual) | $12.75 | — | — |
| FY2026E | $12.15 | -4.7% | 16 |
| FY2027E | $13.52 | +11.3% | 15 |
| FY2028E | $14.97 | +10.7% | 7 |
| FY2029E | $16.59 | +10.8% | 3 |
| FY2030E | $18.23 | +9.8% | 6 |
5Y Forward EPS CAGR: 7.4%
| Year | Net Income | EPS | YoY |
|---|---|---|---|
| FY2021 | $3.0B | $12.11 | — |
| FY2022 | $3.3B | $13.88 | +14.6% |
| FY2023 | $1.8B | $8.02 | -42.2% |
| FY2024 | $2.6B | $11.57 | +44.3% |
| FY2025 | $2.9B | $12.75 | +10.2% |
4Y Historical EPS CAGR: 1.3%
The PEG Fair Value uses the Price/Earnings-to-Growth framework. A stock is fairly valued when its P/E ratio equals its earnings growth rate (PEG = 1.0). This model adds dividend yield to the growth rate per the original PEGY formula.
Growth rate priority: analyst consensus forward EPS CAGR (when ≥ 3 analysts cover the stock), falling back to historical EPS CAGR. Using EPS rather than net income avoids distortion from share buybacks. The growth rate is clamped between 8% and 25% — below 8% would undervalue stable earners, while above 25% would overvalue unsustainable spikes.