NSC
Norfolk Southern Corporation
$317.79
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 66.2% above fair value
You pay
$317.79
Bear
$153.00
Fair
$191.25
Bull
$229.50
Bear
$153.00
-51.9%
$12.75 × 12x P/E
Fair
$191.25
-39.8%
$12.75 × 15x P/E
Bull
$229.50
-27.8%
$12.75 × 18x P/E
Adjust Assumptions
15.0x
12.75$
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
24.9x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (48 analysts)
$361.86
Divergence from AlphaVal
47%
Summary
Applying a 15x P/E to adjusted EPS of $12.75, the base-case value is $191.25 per share. DDM cross-check: $97.66.
Warnings
Dividend-based valuation: $97.66 (below our primary estimate by 49%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $361.86 (from 48 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