CSX
CSX Corporation
$47.26
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 104.6% above fair value
You pay
$47.26
Bear
$18.48
Fair
$23.10
Bull
$27.72
Bear
$18.48
-60.9%
$1.54 × 12x P/E
Fair
$23.10
-51.1%
$1.54 × 15x P/E
Bull
$27.72
-41.3%
$1.54 × 18x P/E
Adjust Assumptions
15.0x
1.54$
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
30.7x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (46 analysts)
$51.00
Divergence from AlphaVal
55%
Summary
Applying a 15x P/E to adjusted EPS of $1.54, the base-case value is $23.10 per share. DDM cross-check: $57.65.
Warnings
Dividend-based valuation: $57.65 (above our primary estimate by 150%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $51.00 (from 46 analysts). Our estimate is 55% 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