As previously reported, Avondale downgraded Norfolk Southern to Underperform from Market Perform. Analyst Donald Broughton continues to believe volumes will continue to decline, yields will continue to disappoint, cost savings will be increasingly harder to achieve, ROIC will continue to deteriorate, and the combination of those factors should result in FY17 earnings below FY16, pressuring valuation.

Ancora Holdings Group, which owns a large equity stake in Norfolk Southern Corporation, announced that its seven candidates for election to the company's 13-member Board of Directors have received support from the Brotherhood of Locomotive Engineers and Trainmen Division of the International Brotherhood of Teamsters. The BLET Teamsters represent locomotive engineers, conductors, brakemen, firemen, switchmen, hostlers and other train service employees at Norfolk Southern. The BLET Teamsters is the second major labor union in as many days to support the Shareholder Slate and its management team, following the announcement of support from the BMWED Teamsters on April 25th. Regarding the BLET Teamsters' decision, proposed CEO Jim Barber stated: "It's a privilege to receive support from the BLET Teamsters, who believe in our plan to improve performance, safety and employee relations at Norfolk Southern. Jamie Boychuk and I had an extremely productive conversation with the Brotherhood about the issues the railroad faces today under current management. We look forward to the opportunity to collaborate with the BLET Teamsters to build a more efficient, safer and sustainable railroad."

The Brotherhood of Maintenance of Way Employes Division of the International Brotherhood of Teamsters announced that it has determined a change in leadership at Norfolk Southern Corporation is necessary. Tony Cardwell, President of BMWED-IBT, commented: "The BMWED-IBT, after more than a year of non-committal hedging on reasonable, needed changes and untenable shakiness in management at Norfolk Southern, has determined that a change in leadership is needed for the freight rail carrier and its employees. Following yesterday's earnings call and a reasonably constructive meeting with a potential new leadership team, our Brotherhood has determined that a change at the top would be the best course of action for BMWED-IBT members. For many months since East Palestine, the BMWED has not been able to get assurances from the current leadership to implement needed policy and procedural changes to prevent such tragedies from reoccurring. At this juncture, seeing no path forward, we see no reason to support the current administration at Norfolk Southern."

UBS analyst Thomas Wadewitz lowered the firm's price target on Norfolk Southern to $294 from $302 and keeps a Buy rating on the shares. Norfolk Southern's Q1 was in like with the pre-report, reflecting weak revenue and margin pressure, the analyst tells investors in a research note.