CSX
CSX Corporation
$49.41
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 63.6% above fair value
You pay
$49.41
Bear
$24.15
Fair
$30.19
Bull
$36.23
Bear
$24.15
-51.1%
$1.55 × 12x P/E
Fair
$30.19
-38.9%
$1.55 × 15x P/E
Bull
$36.23
-26.7%
$1.55 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
31.9x
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 $46.47 from 46 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $30.19 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 $46.47 (from 46 analysts). Our estimate is 50% 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