Railroads · NYSE
Current Price
$312.12
Intrinsic Value
Use the calculator below to estimate
Run a full DCF analysis on Norfolk Southern Corporation with auto-filled fundamentals, adjustable assumptions, and sensitivity heatmap.
Norfolk Southern Corporation, together with its subsidiaries, engages in the rail transportation of raw materials, intermediate products, and finished goods in the United States. The company transports agriculture, forest, and consumer products comprising soybeans, wheat, corn, fertilizers, livestock and poultry feed, food products, food oils, flour, sweeteners, ethanol, lumber and wood products, pulp board and paper products, wood fibers, wood pulp, scrap paper, beverages, canned goods, and consumer products; chemicals consist of sulfur and related chemicals, petroleum products, chlorine and bleaching compounds, plastics, rubber, industrial chemicals, chemical wastes, and sand; metals and construction materials, such as steel, aluminum products, machinery, scrap metals, cement, aggregates, minerals, clay, transportation equipment, and military-related products; and automotive, including finished motor vehicles and automotive parts, as well as coal. It also transports overseas freight through various Atlantic and Gulf Coast ports; and provides commuter rail passenger transportation services and operates an intermodal network. As of December 31, 2021, the company operated approximately 19,300 route miles in 22 states and the District of Columbia. Norfolk Southern Corporation was incorporated in 1980 and is based in Atlanta, Georgia.
ROIC (TTM)
7.3%
ROE (TTM)
17.4%
FCF Yield
5.45%
Based on trailing twelve-month data, NSC shows a free cash flow per share of N/A and a ROIC of 7.3%, key inputs for stock valuation using the DCF method. The P/FCF ratio of N/A and FCF yield of 5.45% are important context metrics when evaluating NSC's stock valuation relative to peers.
The intrinsic value of NSC depends on assumptions about future growth rate, discount rate (WACC), and terminal value. A DCF model discounts projected free cash flows back to present value — small changes in WACC can shift the estimate by 20% or more, which is why sensitivity analysis is essential.
Whether NSC is undervalued depends on comparing the DCF-derived intrinsic value to the current market price of $312.12. A positive margin of safety (intrinsic value above market price) suggests potential undervaluation, but the degree of confidence depends on the reliability of your growth and discount rate assumptions.
To perform a DCF valuation on Norfolk Southern Corporation: (1) Start with the trailing free cash flow per share as the base, (2) project future FCF growth over 5-10 years based on Railroads industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting NSC's risk profile, and (4) add a terminal value for cash flows beyond the projection period.
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Norfolk Southern Corporation, this means projecting how much free cash flow the Railroads will produce over the next 5-10 years, then discounting those amounts to today's dollars. NSC's ROIC of 7.3% suggests the company may face challenges generating returns above its cost of capital.
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For NSC, the capital structure and equity risk premium determine WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%.
