Analysts are still bullish on railroad, shipping and logistics firm Norfolk Southern ($NSC) even after a heady year of 28% gains in 2019.
UBS analysts named Norfolk Southern one of "Our Highest Conviction Calls" for 2020, predicting another 15% in returns for investors and hitching a "buy" rating to the shares that accompanied a new price target of $225 per share.
Our chart tracks job postings from Norfolk Southern - ordinarily, a big dip in job postings isn't necessarily a great signal. But, taken in tandem with analysts' commentary, a positive theme becomes clear. In 2020, job postings for Norfolk Southern are less than 50% what they were in 2018, signaling that initiatives to be more effective on the cost side of the business have taken hold.
"We believe NSC is likely to realize significant productivity gains," UBS senior equity research analyst Tom Wadewitz wrote in the report, adding later, "NSC expects to exit 2019 with headcount 13% lower than year-end 2018 levels."
Our second chart goes not just to efficiency but toward digitization: five years ago, Norfolk Southern launched ExpressNS, aimed at both. The chart above tracks Apple ($AAPL) Store Ratings Count for Norfolk Southern's app - the upside is that it tracked 34% increases across 2019; the downside is that it's still only got a few dozen ratings. Here's how the company explained the offering:
In 2015, Norfolk Southern introduced ExpressNS, an industry-first mobile phone app that speeds truck drivers’ pickup and delivery of trailers and containers at NS intermodal facilities. These drayage truckers provide valuable first- and last-mile service for customers’ freight. Moving them through NS’ intermodal facilities more quickly means less idling, reduced fuel burn and costs, and reduced carbon emissions.
The good news is - which the chart reflects - is that Norfolk Southern clients are in fact engaging with their mobile product, but at a pretty slow pace for legacy users of what has traditionally been a process that lagged other industries' digitization standards - especially when it comes to shipping and customs. But with competitors large (Uber's trucking offering) and small (the still well-funded NEXT Trucking), it seems like soon, when it comes to its digital marketplace strategy, Norfolk Southern is going to need to get its freight up.
Investors will get a better view of the company's performance improvement on January 23, when Norfolk Southern reports earnings.
About the Data:
Thinknum tracks companies using the information they post online - jobs, social and web traffic, product sales and app ratings - and creates data sets that measure factors like hiring, revenue and foot traffic. Data sets may not be fully comprehensive (they only account for what is available on the web), but they can be used to gauge performance factors like staffing and sales.
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