Intrinsic value of CSX - CSX

Previous Close

$53.68

  Intrinsic Value

$15.17

stock screener

  Rating & Target

str. sell

-72%

  Value-price divergence*

-100%

Previous close

$53.68

 
Intrinsic value

$15.17

 
Up/down potential

-72%

 
Rating

str. sell

 
Value-price divergence*

-100%

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of CSX stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 49.5

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -6.28
  8.50
  8.15
  7.83
  7.55
  7.30
  7.07
  6.86
  6.67
  6.51
  6.36
  6.22
  6.10
  5.99
  5.89
  5.80
  5.72
  5.65
  5.58
  5.53
  5.47
  5.43
  5.38
  5.34
  5.31
  5.28
  5.25
  5.23
  5.20
  5.18
  5.16
Revenue, $m
  11,069
  12,010
  12,989
  14,006
  15,064
  16,163
  17,305
  18,493
  19,727
  21,010
  22,346
  23,736
  25,183
  26,691
  28,263
  29,903
  31,613
  33,399
  35,264
  37,212
  39,249
  41,378
  43,606
  45,936
  48,376
  50,929
  53,604
  56,405
  59,340
  62,416
  65,640
Variable operating expenses, $m
 
  6,990
  7,559
  8,152
  8,767
  9,407
  10,072
  10,763
  11,481
  12,228
  13,005
  13,814
  14,657
  15,534
  16,449
  17,403
  18,399
  19,438
  20,524
  21,658
  22,843
  24,082
  25,379
  26,735
  28,155
  29,641
  31,197
  32,828
  34,536
  36,326
  38,202
Fixed operating expenses, $m
 
  1,420
  1,455
  1,491
  1,529
  1,567
  1,606
  1,646
  1,687
  1,730
  1,773
  1,817
  1,863
  1,909
  1,957
  2,006
  2,056
  2,107
  2,160
  2,214
  2,269
  2,326
  2,384
  2,444
  2,505
  2,568
  2,632
  2,698
  2,765
  2,834
  2,905
Total operating expenses, $m
  7,795
  8,410
  9,014
  9,643
  10,296
  10,974
  11,678
  12,409
  13,168
  13,958
  14,778
  15,631
  16,520
  17,443
  18,406
  19,409
  20,455
  21,545
  22,684
  23,872
  25,112
  26,408
  27,763
  29,179
  30,660
  32,209
  33,829
  35,526
  37,301
  39,160
  41,107
Operating income, $m
  3,274
  3,600
  3,974
  4,363
  4,768
  5,189
  5,627
  6,084
  6,558
  7,053
  7,568
  8,104
  8,664
  9,248
  9,857
  10,493
  11,158
  11,853
  12,580
  13,341
  14,137
  14,970
  15,843
  16,757
  17,716
  18,721
  19,775
  20,880
  22,039
  23,256
  24,532
EBITDA, $m
  4,575
  5,010
  5,499
  6,007
  6,536
  7,086
  7,659
  8,254
  8,874
  9,519
  10,190
  10,890
  11,620
  12,381
  13,174
  14,003
  14,869
  15,773
  16,719
  17,708
  18,743
  19,827
  20,961
  22,149
  23,394
  24,699
  26,066
  27,500
  29,004
  30,582
  32,237
Interest expense (income), $m
  606
  614
  724
  839
  960
  1,085
  1,215
  1,350
  1,490
  1,636
  1,788
  1,946
  2,110
  2,281
  2,460
  2,646
  2,840
  3,042
  3,253
  3,474
  3,704
  3,945
  4,197
  4,460
  4,736
  5,024
  5,326
  5,642
  5,974
  6,321
  6,685
Earnings before tax, $m
  2,741
  2,987
  3,251
  3,524
  3,808
  4,104
  4,413
  4,734
  5,068
  5,416
  5,780
  6,158
  6,554
  6,966
  7,397
  7,848
  8,319
  8,811
  9,327
  9,867
  10,433
  11,025
  11,646
  12,297
  12,980
  13,697
  14,448
  15,237
  16,065
  16,935
  17,848
Tax expense, $m
  1,027
  806
  878
  951
  1,028
  1,108
  1,191
  1,278
  1,368
  1,462
  1,560
  1,663
  1,769
  1,881
  1,997
  2,119
  2,246
  2,379
  2,518
  2,664
  2,817
  2,977
  3,144
  3,320
  3,505
  3,698
  3,901
  4,114
  4,338
  4,572
  4,819
Net income, $m
  1,714
  2,180
  2,373
  2,572
  2,780
  2,996
  3,221
  3,456
  3,700
  3,954
  4,219
  4,496
  4,784
  5,085
  5,400
  5,729
  6,073
  6,432
  6,809
  7,203
  7,616
  8,048
  8,502
  8,977
  9,476
  9,999
  10,547
  11,123
  11,728
  12,362
  13,029

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  1,020
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  35,414
  37,298
  40,337
  43,498
  46,783
  50,196
  53,743
  57,430
  61,263
  65,249
  69,396
  73,713
  78,208
  82,892
  87,774
  92,865
  98,178
  103,724
  109,515
  115,566
  121,891
  128,504
  135,422
  142,659
  150,235
  158,166
  166,472
  175,172
  184,287
  193,839
  203,850
Adjusted assets (=assets-cash), $m
  34,394
  37,298
  40,337
  43,498
  46,783
  50,196
  53,743
  57,430
  61,263
  65,249
  69,396
  73,713
  78,208
  82,892
  87,774
  92,865
  98,178
  103,724
  109,515
  115,566
  121,891
  128,504
  135,422
  142,659
  150,235
  158,166
  166,472
  175,172
  184,287
  193,839
  203,850
Revenue / Adjusted assets
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
Average production assets, $m
  30,662
  33,267
  35,979
  38,798
  41,727
  44,772
  47,936
  51,224
  54,643
  58,198
  61,897
  65,748
  69,757
  73,935
  78,289
  82,830
  87,569
  92,515
  97,681
  103,078
  108,719
  114,618
  120,788
  127,244
  134,000
  141,075
  148,483
  156,243
  164,373
  172,893
  181,822
Working capital, $m
  447
  -264
  -286
  -308
  -331
  -356
  -381
  -407
  -434
  -462
  -492
  -522
  -554
  -587
  -622
  -658
  -695
  -735
  -776
  -819
  -863
  -910
  -959
  -1,011
  -1,064
  -1,120
  -1,179
  -1,241
  -1,305
  -1,373
  -1,444
Total debt, $m
  11,293
  12,920
  14,987
  17,137
  19,370
  21,691
  24,103
  26,610
  29,217
  31,927
  34,748
  37,683
  40,740
  43,925
  47,244
  50,707
  54,319
  58,090
  62,028
  66,143
  70,444
  74,941
  79,645
  84,566
  89,718
  95,111
  100,759
  106,675
  112,873
  119,368
  126,176
Total liabilities, $m
  23,735
  25,362
  27,429
  29,579
  31,812
  34,133
  36,545
  39,052
  41,659
  44,369
  47,190
  50,125
  53,182
  56,367
  59,686
  63,149
  66,761
  70,532
  74,470
  78,585
  82,886
  87,383
  92,087
  97,008
  102,160
  107,553
  113,201
  119,117
  125,315
  131,810
  138,618
Total equity, $m
  11,679
  11,935
  12,908
  13,919
  14,970
  16,063
  17,198
  18,378
  19,604
  20,880
  22,207
  23,588
  25,027
  26,525
  28,088
  29,717
  31,417
  33,192
  35,045
  36,981
  39,005
  41,121
  43,335
  45,651
  48,075
  50,613
  53,271
  56,055
  58,972
  62,028
  65,232
Total liabilities and equity, $m
  35,414
  37,297
  40,337
  43,498
  46,782
  50,196
  53,743
  57,430
  61,263
  65,249
  69,397
  73,713
  78,209
  82,892
  87,774
  92,866
  98,178
  103,724
  109,515
  115,566
  121,891
  128,504
  135,422
  142,659
  150,235
  158,166
  166,472
  175,172
  184,287
  193,838
  203,850
Debt-to-equity ratio
  0.967
  1.080
  1.160
  1.230
  1.290
  1.350
  1.400
  1.450
  1.490
  1.530
  1.560
  1.600
  1.630
  1.660
  1.680
  1.710
  1.730
  1.750
  1.770
  1.790
  1.810
  1.820
  1.840
  1.850
  1.870
  1.880
  1.890
  1.900
  1.910
  1.920
  1.930
Adjusted equity ratio
  0.310
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,714
  2,180
  2,373
  2,572
  2,780
  2,996
  3,221
  3,456
  3,700
  3,954
  4,219
  4,496
  4,784
  5,085
  5,400
  5,729
  6,073
  6,432
  6,809
  7,203
  7,616
  8,048
  8,502
  8,977
  9,476
  9,999
  10,547
  11,123
  11,728
  12,362
  13,029
Depreciation, amort., depletion, $m
  1,301
  1,410
  1,525
  1,644
  1,768
  1,897
  2,031
  2,171
  2,315
  2,466
  2,623
  2,786
  2,956
  3,133
  3,317
  3,510
  3,711
  3,920
  4,139
  4,368
  4,607
  4,857
  5,118
  5,392
  5,678
  5,978
  6,292
  6,620
  6,965
  7,326
  7,704
Funds from operations, $m
  3,040
  3,590
  3,897
  4,216
  4,548
  4,893
  5,252
  5,626
  6,015
  6,420
  6,842
  7,282
  7,740
  8,218
  8,717
  9,239
  9,783
  10,353
  10,948
  11,571
  12,223
  12,905
  13,620
  14,369
  15,154
  15,976
  16,839
  17,744
  18,693
  19,688
  20,733
Change in working capital, $m
  -1
  -21
  -22
  -22
  -23
  -24
  -25
  -26
  -27
  -28
  -29
  -31
  -32
  -33
  -35
  -36
  -38
  -39
  -41
  -43
  -45
  -47
  -49
  -51
  -54
  -56
  -59
  -62
  -65
  -68
  -71
Cash from operations, $m
  3,041
  3,611
  3,919
  4,239
  4,571
  4,918
  5,278
  5,652
  6,042
  6,448
  6,871
  7,312
  7,772
  8,251
  8,752
  9,275
  9,821
  10,392
  10,989
  11,614
  12,267
  12,952
  13,669
  14,420
  15,207
  16,032
  16,898
  17,805
  18,757
  19,756
  20,804
Maintenance CAPEX, $m
  0
  -1,299
  -1,410
  -1,525
  -1,644
  -1,768
  -1,897
  -2,031
  -2,171
  -2,315
  -2,466
  -2,623
  -2,786
  -2,956
  -3,133
  -3,317
  -3,510
  -3,711
  -3,920
  -4,139
  -4,368
  -4,607
  -4,857
  -5,118
  -5,392
  -5,678
  -5,978
  -6,292
  -6,620
  -6,965
  -7,326
New CAPEX, $m
  -2,398
  -2,605
  -2,711
  -2,819
  -2,930
  -3,045
  -3,164
  -3,288
  -3,419
  -3,555
  -3,699
  -3,850
  -4,010
  -4,177
  -4,354
  -4,541
  -4,738
  -4,946
  -5,166
  -5,397
  -5,641
  -5,899
  -6,170
  -6,456
  -6,757
  -7,074
  -7,408
  -7,760
  -8,130
  -8,520
  -8,930
Cash from investing activities, $m
  -1,798
  -3,904
  -4,121
  -4,344
  -4,574
  -4,813
  -5,061
  -5,319
  -5,590
  -5,870
  -6,165
  -6,473
  -6,796
  -7,133
  -7,487
  -7,858
  -8,248
  -8,657
  -9,086
  -9,536
  -10,009
  -10,506
  -11,027
  -11,574
  -12,149
  -12,752
  -13,386
  -14,052
  -14,750
  -15,485
  -16,256
Free cash flow, $m
  1,243
  -294
  -202
  -105
  -2
  105
  217
  333
  453
  577
  706
  839
  976
  1,118
  1,265
  1,416
  1,573
  1,735
  1,903
  2,077
  2,258
  2,446
  2,642
  2,846
  3,059
  3,280
  3,512
  3,754
  4,007
  4,271
  4,548
Issuance/(repayment) of debt, $m
  781
  1,958
  2,067
  2,149
  2,234
  2,321
  2,412
  2,507
  2,606
  2,711
  2,820
  2,935
  3,057
  3,185
  3,320
  3,462
  3,612
  3,771
  3,938
  4,115
  4,301
  4,497
  4,704
  4,922
  5,151
  5,393
  5,648
  5,916
  6,198
  6,495
  6,808
Issuance/(repurchase) of shares, $m
  -1,056
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -588
  1,958
  2,067
  2,149
  2,234
  2,321
  2,412
  2,507
  2,606
  2,711
  2,820
  2,935
  3,057
  3,185
  3,320
  3,462
  3,612
  3,771
  3,938
  4,115
  4,301
  4,497
  4,704
  4,922
  5,151
  5,393
  5,648
  5,916
  6,198
  6,495
  6,808
Total cash flow (excl. dividends), $m
  655
  1,664
  1,865
  2,044
  2,231
  2,426
  2,629
  2,840
  3,059
  3,288
  3,526
  3,774
  4,033
  4,303
  4,584
  4,878
  5,185
  5,506
  5,841
  6,192
  6,559
  6,943
  7,346
  7,768
  8,210
  8,674
  9,160
  9,670
  10,205
  10,767
  11,356
Retained Cash Flow (-), $m
  -27
  -945
  -973
  -1,011
  -1,051
  -1,092
  -1,135
  -1,180
  -1,227
  -1,276
  -1,327
  -1,381
  -1,438
  -1,499
  -1,562
  -1,629
  -1,700
  -1,775
  -1,853
  -1,936
  -2,024
  -2,116
  -2,214
  -2,316
  -2,424
  -2,538
  -2,658
  -2,784
  -2,917
  -3,057
  -3,204
Prev. year cash balance distribution, $m
 
  689
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  1,408
  892
  1,033
  1,180
  1,334
  1,494
  1,660
  1,833
  2,013
  2,199
  2,393
  2,595
  2,804
  3,022
  3,249
  3,485
  3,731
  3,988
  4,256
  4,535
  4,827
  5,133
  5,452
  5,786
  6,136
  6,502
  6,886
  7,288
  7,710
  8,153
Discount rate, %
 
  6.90
  7.25
  7.61
  7.99
  8.39
  8.81
  9.25
  9.71
  10.19
  10.70
  11.24
  11.80
  12.39
  13.01
  13.66
  14.34
  15.06
  15.81
  16.61
  17.44
  18.31
  19.22
  20.18
  21.19
  22.25
  23.37
  24.53
  25.76
  27.05
  28.40
PV of cash for distribution, $m
 
  1,317
  776
  829
  868
  892
  900
  894
  873
  840
  795
  742
  680
  614
  545
  476
  408
  344
  284
  230
  182
  141
  107
  79
  57
  40
  28
  18
  12
  7
  5
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

CSX Corporation is a transportation company. The Company provides rail-based freight transportation services, including traditional rail service and transport of intermodal containers and trailers, as well as other transportation services, such as rail-to-truck transfers and bulk commodity operations. The Company categorizes its products into three primary lines of business: merchandise, intermodal and coal. The Company's intermodal business links customers to railroads through trucks and terminals. The Company's merchandise business consists of shipments in markets, such as agricultural and food products, fertilizers, chemicals, automotive, metals and equipment, minerals and forest products. The Company's coal business transports domestic coal, coke and iron ore to electricity-generating power plants, steel manufacturers and industrial plants, as well as export coal to deep-water port facilities.

FINANCIAL RATIOS  of  CSX (CSX)

Valuation Ratios
P/E Ratio 29.1
Price to Sales 4.5
Price to Book 4.3
Price to Tangible Book
Price to Cash Flow 16.4
Price to Free Cash Flow 77.5
Growth Rates
Sales Growth Rate -6.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -6.4%
Cap. Spend. - 3 Yr. Gr. Rate 0.7%
Financial Strength
Quick Ratio 3
Current Ratio 0.1
LT Debt to Equity 93.9%
Total Debt to Equity 96.7%
Interest Coverage 6
Management Effectiveness
Return On Assets 6%
Ret/ On Assets - 3 Yr. Avg. 6.6%
Return On Total Capital 7.6%
Ret/ On T. Cap. - 3 Yr. Avg. 8.7%
Return On Equity 14.7%
Return On Equity - 3 Yr. Avg. 16.6%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 63.1%
Gross Margin - 3 Yr. Avg. 61.2%
EBITDA Margin 42%
EBITDA Margin - 3 Yr. Avg. 40.4%
Operating Margin 29.6%
Oper. Margin - 3 Yr. Avg. 29.5%
Pre-Tax Margin 24.8%
Pre-Tax Margin - 3 Yr. Avg. 25.1%
Net Profit Margin 15.5%
Net Profit Margin - 3 Yr. Avg. 15.8%
Effective Tax Rate 37.5%
Eff/ Tax Rate - 3 Yr. Avg. 37.1%
Payout Ratio 39.7%

CSX stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CSX stock intrinsic value calculation we used $11069 million for the last fiscal year's total revenue generated by CSX. The default revenue input number comes from 2016 income statement of CSX. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our CSX stock valuation model: a) initial revenue growth rate of 8.5% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 6.9%, whose default value for CSX is calculated based on our internal credit rating of CSX, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of CSX.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of CSX stock the variable cost ratio is equal to 58.2%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $1385 million in the base year in the intrinsic value calculation for CSX stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.6% for CSX.

Corporate tax rate of 27% is the nominal tax rate for CSX. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the CSX stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for CSX are equal to 277%.

Life of production assets of 23.6 years is the average useful life of capital assets used in CSX operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for CSX is equal to -2.2%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $11679 million for CSX - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 922.211 million for CSX is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of CSX at the current share price and the inputted number of shares is $49.5 billion.

RELATED COMPANIES Price Int.Val. Rating
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CNI Canadian Natio 81.09 20.97  str.sell

COMPANY NEWS

▶ Why CSXs Operating Margins Soared in 3Q17   [Oct-18-17 04:57PM  Market Realist]
▶ CSXs Double-Digit Coal Revenue Rise in 3Q17   [04:57PM  Market Realist]
▶ CSX Keeps Inching Ahead   [Oct-17-17 06:59PM  Motley Fool]
▶ CSX Nears Buy Point But Autos Weigh On Q3 Volume   [05:04PM  Investor's Business Daily]
▶ CSX earnings fall, but analysts are cautiously optimistic   [10:35AM  American City Business Journals]
▶ CSX earnings preview: An 'underwhelming' Q3 may set stage for long-term success.   [Oct-16-17 02:45PM  American City Business Journals]
▶ CSX Railroad Has Left the Station   [Oct-13-17 05:35PM  TheStreet.com]
▶ What Led CSXs Freight Volume Rise in Week 40   [05:05PM  Market Realist]
▶ What to Expect from CSXs Dividend in 2018   [Oct-12-17 09:09AM  Market Realist]
▶ [$$] CSX, Shippers Clash Over Service Problems   [12:17AM  The Wall Street Journal]
▶ [$$] CSX, Shippers Clash Over Service Problems   [02:30PM  The Wall Street Journal]
▶ Will CSX See Better Margins in 3Q17?   [02:06PM  Market Realist]
▶ How CSX Stock Has Performed This Year   [10:49AM  Market Realist]
▶ Inside Norfolk Southerns Freight Volume Growth in Week 39   [Oct-09-17 09:12AM  Market Realist]
▶ Behind CSXs Shipment Decline in Week 39   [07:43AM  Market Realist]
▶ [$$] For CSX, a Delay That Is Finally Good News   [12:33AM  The Wall Street Journal]
▶ [$$] For CSX, a Delay That Is Finally Good News   [Oct-07-17 08:00AM  The Wall Street Journal]
▶ CSX Corporation Declares Quarterly Dividend   [Oct-05-17 04:15PM  GlobeNewswire]
▶ CSX Service Continues to Strengthen   [03:17PM  GlobeNewswire]
▶ Cramer reveals the market's top 10 actionable negatives   [Oct-04-17 06:36PM  CNBC Videos]
▶ Market's top 10 actionable negatives   [06:17PM  CNBC Videos]
▶ Ripken Foundation breaks ground on ninth Baltimore-area park   [Oct-03-17 11:45AM  American City Business Journals]
▶ Why CSXs Freight Volumes Fell Last Week   [11:02AM  Market Realist]
▶ CSX: Behind the Freight Volume Decline in Week 37   [Sep-26-17 12:36PM  Market Realist]
▶ Jaxport board names new CEO   [10:28AM  American City Business Journals]
▶ After rocky few months, here's how CSX dealt with Irma   [03:15PM  American City Business Journals]
▶ Why CSXs Overall Freight Volumes Declined in Week 36   [Sep-18-17 06:06PM  Market Realist]
▶ What Analysts Recommend for US Railroads   [10:37AM  Market Realist]
▶ [$$] Riding the Railroad Stocks   [Sep-15-17 10:18PM  Barrons.com]
▶ [$$] A CSX Options Strategy to Keep You on Track   [Sep-14-17 01:34PM  Barrons.com]
▶ How Major US Railroads Have Performed in 2017 So Far   [Sep-13-17 04:38PM  Market Realist]
▶ Coking Coal Stocks Still Look Attractive   [10:52AM  Barrons.com]
▶ CSX CEO says railroad is "returning to normal operating rhythm"   [03:45PM  American City Business Journals]
Financial statements of CSX
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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