Railroads Sector Primer
A 40-page primer plus Excel valuation model on Class I railroads: the operating ratio, PSR, revenue per unit, return on capital and a year-by-year valuation.
PDF Only
The full primer in PDF format
£25 / ~$32- ✓ 40-page sector primer
- ✓ Worked valuations
- ✓ Screening thresholds
Excel Model
Plug-and-play valuation template
£45 / ~$58- ✓ Pre-built valuation model
- ✓ Sensitivity tables
- ✓ Scenario toggles
PDF + Model
Everything you need in one package
- ✓ 40-page sector primer
- ✓ Valuation model (.xlsx)
- ✓ Save £11 vs buying separately
Three primers, three Excel models
Shipping, Airlines, and Railroads. Everything at ~25% off
Inside the primer
The 15-section contents, a worked valuation page, and the Excel dashboard.
Table of Contents
- 01 How Railroads Make Money
- 02 Listed Class I Types
- 03 PSR (Precision Scheduled Railroading) Maturity and the Efficiency Ladder
- 04 Segments and Sub-Markets
- 05 Revenue Drivers: Worked Build
- 06 Cost Structure: Operating Ratio Vocabulary
- 07 Valuation Frameworks
- 08 Worked Example: OR-Improvement Valuation Engine
- 09 Applied Cases: Efficiency and Mix
- 10 Applied Cases: Capital, Volume and Pricing
- 11 The Companies in This Primer
- 12 Key Metrics and Screening
- 13 Risks, Benchmarks and Case Study
- 14 Rail vs Truck: The Adjacent Freight Model
- 15 Glossary and Cheat Sheet
40 pages · 15 sections · 2 worked examples
The Excel model
Educational material for professional use. This primer and its model are not investment advice or a recommendation to buy or sell any security, and they are not personalised. Worked valuations use illustrative calibrations, not fair-value estimates for any company.
A railroad owns its track, and most of its costs are there whether the trains run full or not. So each extra carload falls mostly to profit, and the operating ratio, costs as a share of revenue, becomes the number that decides what the network is worth. Valuing a railroad means valuing that ratio over time: where it is now, where it can get to and how long that takes.
The primer builds the tools in order: how railroads make money, the listed Class I types, scheduled-railroading maturity, then the revenue build from volume and revenue per unit and the cost side in operating-ratio terms. Two worked examples run from first input to value, a mature compounder and an improvement story, before applied cases on efficiency and mix, and on capital, volume and pricing. Screening closes with the operating ratio, return on capital against its cost, capex intensity and cash returned, followed by the rail-versus-truck comparison.
Free guides on the site cover the individual pieces, so you can revise one idea without reopening the PDF: the operating ratio, operating ratios compared, precision scheduled railroading, revenue per unit and mix, intermodal share by railroad, intermodal vs trucking and return on capital. Research profiles for Union Pacific, CSX, Norfolk Southern, Canadian National and CPKC run the same screens on filed results. The companion Excel model spans eleven sheets, from the two railroad builds through the margin bridge, return on capital and free cash flow to a live sensitivity grid, so entering your own railroad rebuilds the valuation from its volumes up.
Sheets: Quick Start, Instructions, Assumptions, Mature Compounder, Improvement Story, Valuation Summary, OR & Margin Bridge, ROIC vs WACC, FCF & Capital Returns, Sensitivity, Dashboard.
See this methodology applied to a real company:
Union Pacific (UNP) →