Discounted Cash Flow (DCF) Analysis Unlevered

Norfolk Southern Corporation (NSC)

$228.03

+1.56 (+0.69%)

All numbers are in Millions, Currency in USD

Stock DCF: 140.84 | 228.03 | overvalue

Operating Data

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Revenue	11,458	11,296	9,789	11,142	12,745	13,173.67	13,616.76	14,074.75	14,548.15	15,037.47
Revenue (%)
EBITDA	5,130	5,234	4,694	5,705	6,043	6,262.14	6,472.76	6,690.47	6,915.50	7,148.10
EBITDA (%)
EBIT	4,026	4,095	3,540	4,524	4,822	4,900.33	5,065.15	5,235.51	5,411.60	5,593.62
EBIT (%)
Depreciation	1,104	1,139	1,154	1,181	1,221	1,361.81	1,407.62	1,454.96	1,503.90	1,554.48
Depreciation (%)

Balance Sheet Data

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Total Cash	358	580	1,115	839	456	810.37	837.63	865.80	894.92	925.02
Total Cash (%)
Account Receivables	1,009	920	848	976	1,148	1,142.96	1,181.40	1,221.14	1,262.21	1,304.66
Account Receivables (%)
Inventories	207	244	221	218	253	267.85	276.85	286.17	295.79	305.74
Inventories (%)
Accounts Payable	1,505	1,428	1,016	1,351	1,293	1,539.37	1,591.15	1,644.66	1,699.98	1,757.16
Accounts Payable (%)
Capital Expenditure	-1,951	-2,019	-1,494	-1,470	-1,948	-2,071.98	-2,141.66	-2,213.70	-2,288.16	-2,365.12
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 228.03
Beta	1.293
Diluted Shares Outstanding	235.60
Cost of Debt
Tax Rate	20.82
After-tax Cost of Debt	3.61%
Risk-Free Rate
Market Risk Premium
Cost of Equity	10.341
Total Debt	15,182
Total Equity	53,723.87
Total Capital	68,905.87
Debt Weighting	22.03
Equity Weighting	77.97
Wacc

Build Up Free Cash

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Revenue	11,458	11,296	9,789	11,142	12,745	13,173.67	13,616.76	14,074.75	14,548.15	15,037.47
EBITDA	5,130	5,234	4,694	5,705	6,043	6,262.14	6,472.76	6,690.47	6,915.50	7,148.10
EBIT	4,026	4,095	3,540	4,524	4,822	4,900.33	5,065.15	5,235.51	5,411.60	5,593.62
Tax Rate	23.15%	22.03%	20.43%	22.51%	20.82%	21.79%	21.79%	21.79%	21.79%	21.79%
EBIAT	3,094.07	3,192.95	2,816.61	3,505.58	3,817.90	3,832.59	3,961.50	4,094.74	4,232.46	4,374.82
Depreciation	1,104	1,139	1,154	1,181	1,221	1,361.81	1,407.62	1,454.96	1,503.90	1,554.48
Accounts Receivable	-	89	72	-128	-172	5.04	-38.44	-39.74	-41.07	-42.45
Inventories	-	-37	23	3	-35	-14.85	-9.01	-9.31	-9.63	-9.95
Accounts Payable	-	-77	-412	335	-58	246.37	51.78	53.52	55.32	57.18
Capital Expenditure	-1,951	-2,019	-1,494	-1,470	-1,948	-2,071.98	-2,141.66	-2,213.70	-2,288.16	-2,365.12
UFCF	2,247.07	2,287.95	2,159.61	3,426.57	2,825.90	3,358.99	3,231.77	3,340.47	3,452.82	3,568.96
WACC
PV UFCF						3,085.61	2,727.12	2,589.42	2,458.68	2,334.53
SUM PV UFCF										13,195.35

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	8.86
Free cash flow (t + 1)	3,640.34
Terminal Value	53,066.15
Present Value of Terminal Value	34,711.70

Intrinsic Value

Enterprise Value	47,907.06
Net Debt	14,726
Equity Value	33,181.06
Shares Outstanding	235.60
Equity Value Per Share	140.84