DCF Tool

KSU

Kansas City Southern – Line-Haul Railroads
Headquartered in Kansas City, Mo., Kansas City Southern (KCS) is a transportation holding company that has railroad investments in the U.S., Mexico and Panama. Its primary U.S. holding is The Kansas City Southern Railway Company, serving the central and south central U.S. Its international holdings include Kansas City Southern de Mexico, S.A. de C.V., serving northeastern and central Mexico and the port cities of Lázaro Cárdenas, Tampico and Veracruz, and a 50 percent interest in Panama Canal Railway Company, providing ocean-to-ocean freight and passenger service along the Panama Canal. KCS' North American rail holdings and strategic alliances with other North American rail partners are primary components of a unique railway system, linking the commercial and industrial centers of the U.S., Mexico and Canada.
Analysis Results
Intrinsic Value $196.16
Latest Price $293.59
Relative Value 50% overvalued
Thoughts on this result? Let us know.
Ad
Cash Flow (Billions)
Analysis Parameters
%
%
%
New Ticker
Ad
Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 20.6%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 8.0%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 20.6%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (billion) Present value (billion)
2021 0.623 0.577
2022 0.752 0.645
2023 0.907 0.72
2024 1.09 0.805
2025 1.32 0.899
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 22.5 billion. This corresponds to a present value of 14.2 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 3.65 billion. Adding in the terminal value gives a total present value of 17.8 billion.

There are presently 91.0 million outstanding shares, so the intrinsic value per share is 196.16.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 625,800,000
Current Cash 188,200,000
Current Liabilities 476,400,000
Current Debt 6,400,000
Non-Cash Working Capital (NCWC) -32,400,000
Change in NCWC -138,900,000
EBIT 1,032,200,000
Tax Provision 204,100,000
Depreciation and Amortization 357,900,000
Capital Expenditure -514,900,000
Unlevered Free Cash Flow 480,381,608
Current Assets 728,600,000
Current Cash 148,800,000
Current Liabilities 491,300,000
Current Debt 18,000,000
Non-Cash Working Capital (NCWC) 106,500,000
Change in NCWC 8,500,000
EBIT 1,056,100,000
Tax Provision 247,600,000
Depreciation and Amortization 350,700,000
Capital Expenditure -653,700,000
Unlevered Free Cash Flow 429,927,803
Current Assets 635,400,000
Current Cash 100,500,000
Current Liabilities 447,000,000
Current Debt 10,100,000
Non-Cash Working Capital (NCWC) 98,000,000
Change in NCWC 139,800,000
EBIT 933,300,000
Tax Provision 257,500,000
Depreciation and Amortization 346,700,000
Capital Expenditure -645,300,000
Unlevered Free Cash Flow 503,528,357
Current Assets 680,100,000
Current Cash 134,100,000
Current Liabilities 971,700,000
Current Debt 383,900,000
Non-Cash Working Capital (NCWC) -41,800,000
Change in NCWC 18,500,000
EBIT 889,000,000
Tax Provision -89,600,000
Depreciation and Amortization 320,900,000
Capital Expenditure -654,000,000
Unlevered Free Cash Flow 574,400,000
Current Assets 648,000,000
Current Cash 170,600,000
Current Liabilities 744,400,000
Current Debt 206,700,000
Non-Cash Working Capital (NCWC) -60,300,000
Change in NCWC -59,200,000
EBIT 770,300,000
Tax Provision 182,800,000
Depreciation and Amortization 305,000,000
Capital Expenditure -623,600,000
Unlevered Free Cash Flow 180,019,480
Current Assets 537,000,000
Current Cash 136,600,000
Current Liabilities 757,600,000
Current Debt 356,100,000
Non-Cash Working Capital (NCWC) -1,100,000
Change in NCWC -47,500,000
EBIT 831,700,000
Tax Provision 187,300,000
Depreciation and Amortization 284,600,000
Capital Expenditure -849,600,000
Unlevered Free Cash Flow -12,404,831
Current Assets 818,300,000
Current Cash 348,000,000
Current Liabilities 898,800,000
Current Debt 474,900,000
Non-Cash Working Capital (NCWC) 46,400,000
Change in NCWC -67,900,000
EBIT 868,500,000
Tax Provision 208,800,000
Depreciation and Amortization 258,100,000
Capital Expenditure -997,000,000
Unlevered Free Cash Flow -192,602,061
Current Assets 942,400,000
Current Cash 429,500,000
Current Liabilities 730,600,000
Current Debt 332,000,000
Non-Cash Working Capital (NCWC) 114,300,000
Change in NCWC 29,200,000
EBIT 757,400,000
Tax Provision 198,300,000
Depreciation and Amortization 223,300,000
Capital Expenditure -838,200,000
Unlevered Free Cash Flow -100,585,025
Current Assets 522,300,000
Current Cash 72,600,000
Current Liabilities 424,800,000
Current Debt 60,200,000
Non-Cash Working Capital (NCWC) 85,100,000
Change in NCWC -83,900,000
EBIT 692,200,000
Tax Provision 237,000,000
Depreciation and Amortization 198,800,000
Capital Expenditure -540,000,000
Unlevered Free Cash Flow 955,613

This analysis is provided for informational purposes only and does not constitute financial or investing advice. For more information on the advantages and limitations of DCF analysis see background. This information is provided on an "as is" basis. No warranty, expressed or implied, is made regarding accuracy, adequacy, completeness, legality, reliability or usefulness of any information. By using this site you agree that under no circumstances shall Valuation Tools LLC be held liable for any loss or damage caused by information obtained from this website including any articles, data, videos, its social media accounts, or any other materials.