NSC
Norfolk Southern Corporation
$340.16
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 43.6% above fair value
You pay
$340.16
Bear
$189.45
Fair
$236.82
Bull
$284.18
Bear
$189.45
-44.3%
$12.75 × 12x P/E
Fair
$236.82
-30.4%
$12.75 × 15x P/E
Bull
$284.18
-16.5%
$12.75 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
26.7x
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 $343.14 from 48 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $236.82 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 $343.14 (from 48 analysts). Our estimate is 44% 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