NSC - Embedded Expectations Analysis - 2018 01 24
- Norfolk Southern Corporation (NSC:USA) currently trades at historical highs relative to UAFRS-based (Uniform) Assets, with a 1.6x Uniform P/B, implying bullish expectations for the firm. However, management has concerns about growth, costs, and initiatives- Management may be concerned about the sustainability of their domestic volume growth, and about continued headwinds in agriculture related to delayed harvests. Furthermore, they may lack confidence in their outlook for headcount and labor cost next year. Also, they may be exaggerating their ability to upgrade Customer Service Center technology, as well as their ability to increase train lengths and reduce fuel consumption with planned initiatives. Finally, they may lack confidence in their ability to continue executing against their strategic plans, key productive initiatives, and long-term strategy
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- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
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