Norfolk Southern Corp. is in the spotlight amid the fallout from the derailment of a train carrying hazardous materials on the outskirts of East Palestine, Ohio, earlier this month.
No one was killed or injured in the derailment of about 50 cars, which sent flames and black smoke billowing into the sky, although local residents are seeking answers about the health effects of the toxic chemicals that were spilled or burned off in the disaster.
stock fell 0.9% Thursday, while the S&P 500
declined 0.5%. Since the Feb. 3 disaster, Norfolk Southern’s stock has fallen 5.9%, outpacing the S&P 500’s decline of 0.21% over the same period.
The derailment will likely force Norfolk Southern to call out a “noteworthy” special charge when it reports first-quarter results in April, according to Cowen analyst Jason Seidl. “While the severity of the derailment earlier this month is still unclear, if history is a guide, the unfortunate event may not have much long-term impact on the rail carrier’s share,” he wrote in a note this week. “Hence, we would view any noteworthy pullback a buying opportunity.”
Cowen rates Norfolk Southern outperform.
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Of 30 analysts surveyed by FactSet, nine have a buy rating, 19 have a hold rating and two have an underweight or sell rating.
Local residents attending a town-hall meeting in East Palestine Wednesday called for more transparency from Norfolk Southern over the environmental impact of the disaster. Norfolk Southern skipped the meeting, citing safety concerns for staff.
“We will not walk away, East Palestine,” Norfolk Southern CEO Alan Shaw wrote in a letter to the community Thursday. “Our work is underway. Crews are cleaning the site thoroughly, responsibly, and safely.”
Norfolk Southern told MarketWatch that it has completed more than 470 in-home air tests in cooperation with the U.S. Environmental Protection Agency and other governmental agencies. The monitoring has not detected substances related to the incident and does not indicate health risks, the company said. The freight carrier said it has also implemented an extensive outdoor air-monitoring program and is sampling the village’s drinking-water supply and distribution system along with private wells. The company has also distributed over $1.7 million in direct financial assistance, it said, and set up a $1 million charitable fund for East Palestine.
On Wednesday, the Ohio Emergency Management Agency said that new water-testing results have been returned to the Ohio EPA. “These results show no detection of contaminants in raw water from the five wells that feed into East Palestine’s municipal water system,” it said. “Test results from the combined, treated water from all five wells also showed no detection of contaminants associated with the derailment.”
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EPA Administrator Michael Regan is visiting East Palestine Thursday.
“I want the residents of East Palestine to know that we understand their fears and concerns,” he tweeted Wednesday. “That’s why @EPA has had boots on the ground from day 1, leading robust 24/7 air-quality testing and screening homes.”
“We will continue our strong partnership with @GovMikeDeWine and the state of Ohio to protect the community,” he said in a subsequent tweet. “We are going to get through this together and we are holding Norfolk Southern accountable.”