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Norfolk Southern Corp. – Line-Haul Railroads
Norfolk Southern Corporation is one of the nation's premier transportation companies. Its Norfolk Southern Railway Company subsidiary operates approximately 19,300 route miles in 22 states and the District of Columbia, serves every major container port in the eastern United States, and provides efficient connections to other rail carriers. Norfolk Southern is a major transporter of industrial products, including agriculture, forest and consumer products, chemicals, and metals and construction materials. In addition, the railroad operates the most extensive intermodal network in the East and is a principal carrier of coal, automobiles, and automotive parts.
Analysis Results
Intrinsic Value $1,792.60
Latest Price $209.65
Relative Value 88% undervalued
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Cash Flow (Billions)
Analysis Parameters
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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 35.1%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 6.3%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 35.1%, 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)
2022 6.65 6.26
2023 8.99 7.96
2024 12.1 10.1
2025 16.4 12.9
2026 22.2 16.3
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 529 billion. This corresponds to a present value of 367 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 53.5 billion. Adding in the terminal value gives a total present value of 421 billion.

There are presently 235.0 million outstanding shares, so the intrinsic value per share is 1792.6.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 4,334,000,000
Current Cash 1,678,000,000
Current Liabilities 5,042,000,000
Current Debt 1,106,000,000
Non-Cash Working Capital (NCWC) -1,280,000,000
Change in NCWC -902,000,000
EBIT 8,894,000,000
Tax Provision 1,746,000,000
Depreciation and Amortization 2,362,000,000
Capital Expenditure -2,940,000,000
Unlevered Free Cash Flow 5,411,817,947
Current Assets 2,318,000,000
Current Cash 1,115,000,000
Current Liabilities 2,160,000,000
Current Debt 579,000,000
Non-Cash Working Capital (NCWC) -378,000,000
Change in NCWC 105,000,000
EBIT 3,387,000,000
Tax Provision 517,000,000
Depreciation and Amortization 1,154,000,000
Capital Expenditure -1,494,000,000
Unlevered Free Cash Flow 2,459,873,913
Current Assets 2,081,000,000
Current Cash 580,000,000
Current Liabilities 2,300,000,000
Current Debt 316,000,000
Non-Cash Working Capital (NCWC) -483,000,000
Change in NCWC 19,000,000
EBIT 3,989,000,000
Tax Provision 769,000,000
Depreciation and Amortization 1,139,000,000
Capital Expenditure -2,019,000,000
Unlevered Free Cash Flow 2,249,300,200
Current Assets 1,862,000,000
Current Cash 358,000,000
Current Liabilities 2,591,000,000
Current Debt 585,000,000
Non-Cash Working Capital (NCWC) -502,000,000
Change in NCWC -116,000,000
EBIT 3,959,000,000
Tax Provision 803,000,000
Depreciation and Amortization 1,104,000,000
Capital Expenditure -1,951,000,000
Unlevered Free Cash Flow 2,079,575,381
Current Assets 2,149,000,000
Current Cash 690,000,000
Current Liabilities 2,545,000,000
Current Debt 700,000,000
Non-Cash Working Capital (NCWC) -386,000,000
Change in NCWC -32,000,000
EBIT 3,601,000,000
Tax Provision -2,276,000,000
Depreciation and Amortization 1,059,000,000
Capital Expenditure -1,723,000,000
Unlevered Free Cash Flow 2,905,000,000
Current Assets 2,291,000,000
Current Cash 956,000,000
Current Liabilities 2,339,000,000
Current Debt 650,000,000
Non-Cash Working Capital (NCWC) -354,000,000
Change in NCWC -355,000,000
EBIT 3,080,000,000
Tax Provision 914,000,000
Depreciation and Amortization 1,030,000,000
Capital Expenditure -1,887,000,000
Unlevered Free Cash Flow 777,713,400
Current Assets 2,633,000,000
Current Cash 1,101,000,000
Current Liabilities 2,231,000,000
Current Debt 700,000,000
Non-Cash Working Capital (NCWC) 1,000,000
Change in NCWC -126,000,000
EBIT 2,898,000,000
Tax Provision 886,000,000
Depreciation and Amortization 1,059,000,000
Capital Expenditure -2,385,000,000
Unlevered Free Cash Flow 394,555,282
Current Assets 2,778,000,000
Current Cash 973,000,000
Current Liabilities 1,780,000,000
Current Debt 102,000,000
Non-Cash Working Capital (NCWC) 127,000,000
Change in NCWC 373,000,000
EBIT 3,575,000,000
Tax Provision 1,134,000,000
Depreciation and Amortization 956,000,000
Capital Expenditure -2,118,000,000
Unlevered Free Cash Flow 1,492,429,483
Current Assets 3,075,000,000
Current Cash 1,561,000,000
Current Liabilities 2,305,000,000
Current Debt 545,000,000
Non-Cash Working Capital (NCWC) -246,000,000
Change in NCWC 11,000,000
EBIT 3,299,000,000
Tax Provision 1,055,000,000
Depreciation and Amortization 922,000,000
Capital Expenditure -1,971,000,000
Unlevered Free Cash Flow 1,087,156,829
Current Assets 2,242,000,000
Current Cash 668,000,000
Current Liabilities 2,081,000,000
Current Debt 250,000,000
Non-Cash Working Capital (NCWC) -257,000,000
Change in NCWC -156,000,000
EBIT 3,158,000,000
Tax Provision 1,009,000,000
Depreciation and Amortization 922,000,000
Capital Expenditure -2,241,000,000
Unlevered Free Cash Flow 527,662,073

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