CSX
CSX Corporation
$45.52
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 55.3% above fair value
You pay
$45.52
Bear
$23.45
Fair
$29.32
Bull
$35.17
Bear
$23.45
-48.5%
$1.55 × 12x P/E
Fair
$29.32
-35.6%
$1.55 × 15x P/E
Bull
$35.17
-22.7%
$1.55 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
29.4x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $43.54 from 46 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $29.32 per share.
Warnings
Dividend-based valuation: $54.75 (above our primary estimate by 136%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $43.54 (from 46 analysts). Our estimate is 47% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples