MMarketMath

CSX

StalwartQuality: Medium (67/100)3 red flags

CSX Corporation · Industrials · Rail Transportation

$51.44

52w 31.80 – 53.60

20y monthly, adjusted

Mkt cap

$95.3B

P/E

33.1

P/FCF

55.9

FCF yield

1.8%

ROE

22.0%

Shldr yield

2.5%

div 1.0% + bb 1.5%

What today's price assumes

At $95.3B, the market is pricing in 21.7% annual free-cash-flow growth for the next decade (10% discount rate, 2.5% terminal growth). Over the last ten years, FCF actually grew 7.8% per year — the price asks for acceleration beyond the historical record.

Simple DCF per-share range: $14 · $19 · $23 (4% / base / optimistic growth). An estimate, not a target.

Adjust the assumptions yourself →

Historical multiple lens

At its own median P/OCF of 10.2× across 19 years, CSX would trade near $25/share (25th–75th percentile: $15–$30); it trades at 20.7× today.

Assumes the historical multiple regime persists — re-ratings can be permanent.

Growth record

Compound annual growth rates from as-filed 10-K data, split-adjusted

Rev 3y

−1.7%

Rev 5y

+5.9%

Rev 10y

+1.8%

EPS 5y

+5.1%

EPS 10y

+7.9%

FCF 5y

−8.3%

FCF 10y

+7.8%

Fundamentals

Fiscal 2007–2025, from SEC filings

Revenue

2007: $10.0B
2008: $11.3B
2009: $9.0B
2010: $10.6B
2011: $11.8B
2012: $11.8B
2013: $12.0B
2014: $12.7B
2015: $11.8B
2016: $11.1B
2017: $11.4B
2018: $12.3B
2019: $11.9B
2020: $10.6B
2021: $12.5B
2022: $14.9B
2023: $14.7B
2024: $14.5B
2025: $14.1B
$0$5.0B$10.0B
07
11
15
19
23

Net income

2007: $1.3B
2008: $1.4B
2009: $1.1B
2010: $1.6B
2011: $1.9B
2012: $1.9B
2013: $1.9B
2014: $1.9B
2015: $2.0B
2016: $1.7B
2017: $5.5B
2018: $3.3B
2019: $3.3B
2020: $2.8B
2021: $3.8B
2022: $4.1B
2023: $3.7B
2024: $3.5B
2025: $2.9B
$0$2.0B$4.0B
07
11
15
19
23

Free cash flow

2007: $4.0B
2008: $1.2B
2009: $613.0M
2010: $1.4B
2011: $1.2B
2012: $605.0M
2013: $954.0M
2014: $894.0M
2015: $808.0M
2016: $643.0M
2017: $1.4B
2018: $2.9B
2019: $3.2B
2020: $2.6B
2021: $3.3B
2022: $3.4B
2023: $3.3B
2024: $2.7B
2025: $1.7B
$0$1.0B$2.0B$3.0B
07
11
15
19
23

Diluted shares (lower is better)

2007: 3.3B
2008: 3.3B
2009: 3.3B
2010: 3.2B
2011: 3.0B
2012: 2.9B
2013: 2.8B
2014: 2.8B
2015: 2.7B
2016: 2.6B
2017: 2.5B
2018: 2.4B
2019: 2.4B
2020: 2.3B
2021: 2.3B
2022: 2.1B
2023: 2.0B
2024: 1.9B
2025: 1.9B
01.0B2.0B3.0B
07
11
15
19
23

Margins

20%40%07101316192225
Net marginFCF marginGross margin

Capital returned (dividends + buybacks)

2007: $231.0M
2008: $308.0M
2009: $345.0M
2010: $372.0M
2011: $2.0B
2012: $1.3B
2013: $953.0M
2014: $1.1B
2015: $1.5B
2016: $1.7B
2017: $2.7B
2018: $5.4B
2019: $4.1B
2020: $1.7B
2021: $3.7B
2022: $5.6B
2023: $4.4B
2024: $3.2B
2025: $2.4B
$0$2.0B$4.0B
07
11
15
19
23

Cash vs long-term debt

$0$10.0B07101316192225
CashLT debt

Quarterly

Discrete quarters from 10-Q filings; Q4 derived as fiscal year minus Q1–Q3. OCF is unwound from the year-to-date figures 10-Qs report. Compare to the same quarter a year ago — most businesses are seasonal.

Revenue by quarter

Q2'23: $3.7B
Q3'23: $3.6B
Q1'24: $3.7B
Q2'24: $3.7B
Q3'24: $3.6B
Q4'24: $3.5B
Q1'25: $3.4B
Q2'25: $3.6B
Q3'25: $3.6B
Q4'25: $3.5B
Q1'26: $3.5B
Q2'26: $3.9B
$0$1.0B$2.0B$3.0B
23
24
24
25
26

Net income by quarter

Q2'23: $984.0M
Q3'23: $828.0M
Q4'23: $882.0M
Q1'24: $880.0M
Q2'24: $963.0M
Q3'24: $894.0M
Q4'24: $733.0M
Q1'25: $646.0M
Q2'25: $829.0M
Q3'25: $694.0M
Q4'25: $720.0M
Q1'26: $807.0M
Q2'26: $1.0B
$0$500.0M$1.0B
23
24
24
25
26
QuarterRevenueYoYNet incomeYoYEPSOCF
Q2'26$3.9B+10.1%$1.0B+20.9%0.54$1.3B
Q1'26$3.5B+1.7%$807.0M+24.9%0.43$1.3B
Q4'25 *$3.5B−0.9%$720.0M−1.8%0.39$1.4B
Q3'25$3.6B−0.9%$694.0M−22.4%0.37$1.3B
Q2'25$3.6B−3.4%$829.0M−13.9%0.44$635.0M
Q1'25$3.4B−7.0%$646.0M−26.6%0.34$1.3B
Q4'24 *$3.5B—$733.0M−16.9%0.39$1.4B
Q3'24$3.6B+1.3%$894.0M+8.0%0.46$1.7B
Q2'24$3.7B+0.1%$963.0M−2.1%0.49$1.1B
Q1'24$3.7B−0.7%$880.0M−9.7%0.45$1.1B
Q4'23——$882.0M−8.7%0.45$1.5B
Q3'23$3.6B−8.3%$828.0M−25.5%0.41$1.6B
Q2'23$3.7B−3.0%$984.0M−16.5%0.49$1.2B

Track record

Compound annual growth by period. For debt and share count, negative is the good direction.

Series3y5y10y15y
Revenue−1.7%+5.9%+1.8%+1.9%
Operating cash flow−5.8%+1.6%+3.2%+2.3%
Free cash flow−20.6%−8.3%+7.8%+1.2%
EPS (diluted)−7.1%+5.1%+7.9%+8.0%
Equity+1.8%+0.1%+1.2%+2.7%
LT debt+0.5%+2.2%+5.6%+5.1%
Diluted shares−4.4%−4.1%−3.7%−3.5%
Stock price+21.0%+11.0%+20.1%+15.8%

$100, 3 years ago

$177vs $176 in SPY

21.0% vs 20.7%/yr

$100, 5 years ago

$169vs $181 in SPY

11.0% vs 12.6%/yr

$100, 10 years ago

$624vs $412 in SPY

20.1% vs 15.2%/yr

$100, 15 years ago

$906vs $813 in SPY

15.8% vs 15.0%/yr

The $1 test — market value created per $1 of earnings retained (Buffett's hurdle: at least $1)

Last 5 years

$0.67

$9.1B created / $13.4B retained

Last 10 years

$1.99

$52.3B created / $26.3B retained

Quality & capital discipline

Cash-based returns and how management deploys capital

Cash ROIC

14.7%

OCF ÷ (equity + debt)

OCF / EV yield

4.1%

MC vs 10× OCF

2.07

≤1 = priced under 10× OCF

Debt / FCF

10.6y

SBC / FCF

3.2%

Owner earnings

$1.7B

OCF − capex − SBC

OE yield

1.7%

Share count 5y

−3.1%

per year; negative = buybacks

Capital intensity

261.2%

net PP&E ÷ revenue

Sales efficiency

$1.24

new PP&E per $1 new revenue, 5y

Growth engine (5y): reinvested 16.8% of operating cash flow at an incremental return of 8.0% — an organically fundable growth rate of about 1.3% per year (growth ≈ reinvestment rate × incremental ROIC).

Checklist

16 of 26 checks pass · 62%. Checks with structurally missing inputs are excluded.

Growth & Consistency

4/7

  • Revenue growth

    5.9% · 5y CAGR ≥ 5%

    pass

  • EPS growth

    5.1% · 5y CAGR ≥ 5%

    pass

  • FCF growth

    -8.3% · 5y CAGR ≥ 5%

    fail

  • Revenue rises consistently

    4 of 9 · up in ≥ 7 of last 10 years

    fail

  • FCF consistently positive

    10 of 10 · positive in ≥ 8 of last 10 years

    pass

  • Profitable every year

    10 of 10 · net income > 0 in ≥ 8 of last 10

    pass

  • Cash flow keeps up with sales

    1.6% vs 5.9% · OCF CAGR ≥ 0.9× revenue CAGR

    fail

Profitability

6/6

  • Net margin

    20.5% · ≥ 8%

    pass

  • Operating margin

    32.1% · ≥ 10%

    pass

  • Gross margin stable or rising

    — · no drop > 2 pts over 3y

    na

  • Return on equity

    22.0% · ≥ 12%

    pass

  • Cash ROIC

    14.7% · ≥ 12%

    pass

  • FCF margin

    12.1% · ≥ 5%

    pass

  • Earnings back their cash

    OCF $4.6B vs NI $2.9B · OCF ≥ net income (latest FY)

    pass

Balance Sheet

2/5

  • Debt payable from cash flow

    10.6y · LT debt ≤ 3× FCF

    fail

  • Cash cushion

    4% · cash ≥ 50% of LT debt

    fail

  • Leverage

    1.38 · LT debt ≤ 1.5× equity

    pass

  • Equity positive and compounding

    $13.2B · equity > 0 and grew over ~5y

    pass

  • Interest burden

    19% · interest ≤ 15% of operating income

    fail

Capital Allocation

3/4

  • Share count flat or shrinking

    -3.1% · ≤ +0.5%/yr over ~5y

    pass

  • Stock comp restrained

    3% · SBC ≤ 15% of FCF

    pass

  • Distributions funded by FCF

    138% · dividends + buybacks ≤ 100% of FCF

    fail

  • Repurchases are a habit

    10 of 10 · buybacks in ≥ 5 of last 10 years

    pass

Valuation Discipline

1/4

  • FCF yield

    1.8% · ≥ 3%

    fail

  • Earnings multiple

    33.1 · P/E ≤ 25

    fail

  • Price asks less than history delivered

    21.7% vs 7.8% · implied FCF growth ≤ historical FCF CAGR

    fail

  • Shareholder yield

    2.5% · dividends + buybacks ≥ 2% of market cap

    pass

Red flags

Mechanical checks — a flag is a question to investigate, not a verdict

Revenue declining

Latest fiscal-year revenue fell more than 3% versus the prior year.

Heavy debt load

Long-term debt exceeds 5 years of free cash flow.

Distributions exceed FCF

Dividends plus buybacks exceeded free cash flow in the latest fiscal year.

Financial data

As filed in 10-Ks; per-share figures split-adjusted. $ in millions.

FYRevenueGross profitOp incomeNet incomeEPSOCFCapExFCFDividendsBuybacksSBCCashLT debtEquityShares
202514,092—4,5212,8891.544,6132,9021,7119721,3965467018,16513,1601,873
202414,540—5,2453,4701.795,2472,5292,7189302,2374093317,89712,5071,943
202314,657—5,4993,6681.825,5142,2573,2578823,482601,35317,97511,9852,013
202214,853—5,9544,1141.925,5262,1133,4138524,731741,95817,89612,4692,141
202112,522—5,5943,7811.685,0991,7913,3088392,8861072,23916,18513,4512,255
202010,583—4,3622,7651.204,2631,6262,637797867293,12916,30413,1102,305
201911,937—4,9653,3311.394,8501,6573,1937633,3737495815,99311,8632,395
201812,250—4,8693,3091.384,6411,7452,8967514,6715185814,73912,5802,395
201711,408—3,7205,4712.153,4722,0401,4327081,9708940111,79014,7212,542
201611,069—3,4131,7140.653,0412,3986436801,0563760310,96211,6942,637
201511,811—3,5841,9680.723,3702,5628086868041262810,51511,6682,737
201412,669—3,6131,9270.693,3432,449894629517336699,51411,1762,787
201312,026—3,4731,8640.663,2672,313954600353145929,02210,5042,835
201211,763—3,4641,8630.642,9462,341605558734147849,8329,1362,893
201111,795—3,4701,8540.613,4912,2971,1944801,564307839,2418,5983,029
201010,636—3,0711,5630.493,2611,8401,421372—621,2928,6648,7983,210
20099,041—2,2701,1430.352,0391,426613345—171,0298,0088,7683,302
200811,255—2,7511,3550.412,8931,7191,174308—386697,5127,9853,302
200710,030—2,2601,3360.002,184-1,7733,957-231——368—8,6333,302

Some concepts are structurally absent for certain industries (banks report no gross profit or capex). Missing ≠ zero.

Compare with peers →·10-K filings on EDGAR ↗