Using an unlevered Free Cash Flow to Firm (FCFF) model, we project CSX Corporation's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 2.8% to 5.0% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 33, DPO 48, DIO 16). At a 8.2% WACC with mid-year discounting, the terminal value (82% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 13.5x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $46.96 per share, suggesting CSX is undervalued by 18.0% at the current price of $39.80.
Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.
| 2026 | 2027 | 2028 | 2029 | 2030 | Terminal | |
|---|---|---|---|---|---|---|
| Profit Before Tax | 4,743 | 4,961 | 5,156 | 5,448 | 5,718 | 5,861 |
| (−) Net Interest | 811 | 849 | 882 | 932 | 978 | 1,003 |
| (+) D&A | 2,322 | 2,440 | 2,511 | 2,576 | 2,617 | 2,682 |
| EBITDA | 7,877 | 8,249 | 8,549 | 8,957 | 9,313 | 9,546 |
| (−) Tax | 1,118 | 1,170 | 1,216 | 1,284 | 1,348 | — |
| (−) CapEx | 2,378 | 2,487 | 2,585 | 2,732 | 2,867 | — |
| (−) ΔWC | -16 | 24 | 22 | 32 | 30 | — |
| Free Cash Flow (FCF) | 4,397 | 4,569 | 4,727 | 4,908 | 5,069 | — |
| Peers' EBITDA Multiple | 13.5x | |||||
| Terminal Value | 128,969 | |||||
| WACC / Discount Rate | 8.24% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 4,226 | 4,057 | 3,878 | 3,721 | 3,550 | 86,816 |
| Enterprise Value | 106,248 | |||||
| Projection Period | 19,432 | 18.3% | ||||
| Terminal Value | 86,816 | 81.7% | ||||
| (−) Current Net Debt | 18,682 | |||||
| Equity Value | 87,566 | |||||
| (÷) Outstanding Shares | 1864M | |||||
| Fair Price | $47 | +18.0% | ||||
| WACC \ EV/EBITDA Exit Multiple | 9.5x | 11.5x | 13.5x | 15.5x | 17.5x |
|---|---|---|---|---|---|
| 6.2% | $37 | $44 | $52 | $60 | $67 |
| 7.2% | $35 | $42 | $49 | $57 | $64 |
| 8.2% | $33 | $40 | $47 | $54 | $61 |
| 9.2% | $31 | $38 | $45 | $51 | $58 |
| 10.2% | $30 | $36 | $42 | $49 | $55 |
Current price: $39.80. Green = undervalued, Red = overvalued.
Based on default parameters
This is an unlevered Free Cash Flow to Firm (FCFF) model with a 5-year projection period. Revenue, expenses, D&A, and working capital are projected using the same line-by-line approach as the Growth Exit models. The key difference is the terminal value methodology: instead of assuming perpetual cash flow growth, the terminal value is calculated by applying the industry peer median EV/EBITDA multiple to the projected Year 6 EBITDA.
Using a peer exit multiple anchors the terminal value to how the market currently prices comparable companies, rather than relying on a theoretical perpetual growth assumption. This approach captures relative valuation dynamics and is particularly useful when a company is expected to converge toward industry-average profitability over time. The sensitivity matrix shows how fair value changes across different WACC and EV/EBITDA multiple scenarios.