Norfolk Southern: Watch It, But Union Pacific Is The Better Trade In The Deal Now (Earnings Review)

Norfolk Southern (NSC) now trades in tight correlation with Union Pacific (UNP) due to the pending merger, with deal terms implying $326 per NSC share. NSC's Q1 2026 results showed flat revenue at $3B, a 1% volume decline, and deteriorating operating ratio, with EPS down 1.5% year-over-year. The standalone valuation for NSC is $213 per share, presenting a poor risk/reward profile given current pricing and the narrow arbitrage spread.