NSC
Norfolk Southern Corporation
$314.53
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 35.1% above fair value
You pay
$314.53
Bear
$186.27
Fair
$232.83
Bull
$279.40
Bear
$186.27
-40.8%
$12.75 × 12x P/E
Fair
$232.83
-26.0%
$12.75 × 15x P/E
Bull
$279.40
-11.2%
$12.75 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
24.7x
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 $329.86 from 48 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $232.83 per share.
Warnings
Dividend-based valuation: $111.04 (below our primary estimate by 42%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $329.86 (from 48 analysts). Our estimate is 42% 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