Discounted Cash Flow (DCF) Analysis Unlevered

Norfolk Southern Corporation (NSC)

$241.03

+4.33 (+1.83%)

All numbers are in Millions, Currency in USD

Stock DCF: 164.56 | 241.03 | overvalue

Operating Data

Year A/P	2017 Actual	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected
Revenue	10,551	11,458	11,296	9,789	11,142	11,355.46	11,573	11,794.71	12,020.67	12,250.96
Revenue (%)
EBITDA	4,754	5,130	5,234	4,309	5,705	5,254.99	5,355.66	5,458.26	5,562.83	5,669.40
EBITDA (%)
EBIT	3,695	4,026	4,095	3,155	4,524	4,070.76	4,148.74	4,228.22	4,309.23	4,391.78
EBIT (%)
Depreciation	1,059	1,104	1,139	1,154	1,181	1,184.23	1,206.92	1,230.04	1,253.60	1,277.62
Depreciation (%)

Balance Sheet Data

Year A/P	2017 Actual	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected
Total Cash	690	358	580	1,115	839	765.79	780.46	795.41	810.65	826.18
Total Cash (%)
Account Receivables	955	1,009	920	848	976	986.20	1,005.10	1,024.35	1,043.98	1,063.98
Account Receivables (%)
Inventories	222	207	244	221	218	233.58	238.05	242.62	247.26	252
Inventories (%)
Accounts Payable	822	828	710	552	1,351	887.24	904.24	921.56	939.22	957.21
Accounts Payable (%)
Capital Expenditure	-1,723	-1,951	-2,019	-1,494	-1,470	-1,809.75	-1,844.42	-1,879.76	-1,915.77	-1,952.47
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 241.03
Beta	1.363
Diluted Shares Outstanding	246.40
Cost of Debt
Tax Rate	22.51
After-tax Cost of Debt	3.62%
Risk-Free Rate
Market Risk Premium
Cost of Equity	9.174
Total Debt	13,840
Total Equity	59,389.79
Total Capital	73,229.79
Debt Weighting	18.90
Equity Weighting	81.10
Wacc

Build Up Free Cash

Year A/P	2017 Actual	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected
Revenue	10,551	11,458	11,296	9,789	11,142	11,355.46	11,573	11,794.71	12,020.67	12,250.96
EBITDA	4,754	5,130	5,234	4,309	5,705	5,254.99	5,355.66	5,458.26	5,562.83	5,669.40
EBIT	3,695	4,026	4,095	3,155	4,524	4,070.76	4,148.74	4,228.22	4,309.23	4,391.78
Tax Rate	-72.76%	23.15%	22.03%	20.43%	22.51%	3.07%	3.07%	3.07%	3.07%	3.07%
EBIAT	6,383.56	3,094.07	3,192.95	2,510.28	3,505.58	3,945.70	4,021.29	4,098.33	4,176.85	4,256.87
Depreciation	1,059	1,104	1,139	1,154	1,181	1,184.23	1,206.92	1,230.04	1,253.60	1,277.62
Accounts Receivable	-	-54	89	72	-128	-10.20	-18.89	-19.26	-19.62	-20
Inventories	-	15	-37	23	3	-15.58	-4.47	-4.56	-4.65	-4.74
Accounts Payable	-	6	-118	-158	799	-463.76	17	17.32	17.66	17.99
Capital Expenditure	-1,723	-1,951	-2,019	-1,494	-1,470	-1,809.75	-1,844.42	-1,879.76	-1,915.77	-1,952.47
UFCF	5,719.56	2,214.07	2,246.95	2,107.28	3,890.58	2,830.64	3,377.41	3,442.12	3,508.06	3,575.27
WACC
PV UFCF						2,618.05	2,889.16	2,723.38	2,567.10	2,419.79
SUM PV UFCF										13,217.49

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	8.12
Free cash flow (t + 1)	3,646.77
Terminal Value	59,587.80
Present Value of Terminal Value	40,329.90

Intrinsic Value

Enterprise Value	53,547.39
Net Debt	13,001
Equity Value	40,546.39
Shares Outstanding	246.40
Equity Value Per Share	164.56