Union Pacific (UNP) AI Stock Analysis

• Market Cap: $147.27B
• Dividend Yield: 2.16%
• Average Volume (3M): 2.90M
• Price to Earnings (P/E): 21.8
• Beta (1Y): 0.89
• Revenue Growth: 0.54%
• EPS Growth: 6.06%
• Country: US
• Employees: 32,439
• Sector: Industrials
• Sector Strength: 66
• Industry: Transportation
• EPS (TTM): 11.09
• Shares Outstanding: 609,777,900
• 10 Day Avg. Volume: 2,968,107
• 30 Day Avg. Volume: 2,895,010
• PEG Ratio: 3.59
• Price to Book (P/B): N/A
• Price to Sales (P/S): 6.13
• Price to Cash Flow (P/CF): 14.00
• P/FCF Ratio: 14.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $262.74
• Price Target Upside: 8.79% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 19

Union Pacific showcases strong financial health and operational efficiency, with robust cash flow and profitability. The recent earnings call highlighted solid growth prospects, while the share buyback program boosts market confidence. However, attention should be given to leverage and the slightly overbought technical indicators.

Positive Factors

Financial Performance

F2025 outlook comes in ahead of expectations, with EPS growth consistent with the company’s reiterated three-year target.

Operational Performance

Operational execution continues to shine, with efficiency gains seen across the network.

Negative Factors

Revenue Performance

Revenue per carload decreased -5.1% y-y, missing our -3.6% est., driven by declines in Coal and Autos.

Union Pacific Business Overview & Revenue Model

Company Description

Founded in 1969, Nebraska-based Union Pacific Corp., through its principal subsidiary, Union Pacific Railroad Company, engages in railroad and freight transportation services. It offers transportation services for diversified business including agricultural products, food and beverage products, petroleum and gases, chemicals, coal, industrial products, intermodal and automotive.

How the Company Makes Money

Union Pacific generates revenue primarily through its freight rail transportation services. The company's key revenue streams include the transportation of agricultural products, automotive goods, chemicals, coal, industrial products, and intermodal containers. Union Pacific charges its customers based on the volume and weight of goods transported, as well as the distance traveled. The company benefits from long-term contracts with major industrial clients and partnerships with shipping companies to facilitate intermodal transportation, which involves the movement of goods in containers that can be transferred between different modes of transportation. Additionally, Union Pacific invests in technology and infrastructure improvements to enhance operational efficiency and drive profitability. The company is also influenced by factors such as fuel surcharges, pricing strategies, and economic conditions in the sectors it serves.

Union Pacific Financial Statement Overview

Summary

Union Pacific's financial statements exhibit a well-managed and profitable company. Strong profitability, efficient operations, and robust cash flow generation highlight its financial health. However, the company's leverage and moderate revenue growth pose potential risks.

Income Statement

Union Pacific demonstrates robust profitability with a stable gross profit margin averaging around 45% over recent years. The net profit margin is strong, reflecting efficient cost management and profitability. Revenue growth has been modest but positive, with a slight increase in 2024. The EBIT and EBITDA margins are healthy, indicating strong operational efficiency. However, the revenue growth trajectory could be improved to enhance the score further.

Balance Sheet

The balance sheet reveals a company with significant leverage but stable equity growth. The debt-to-equity ratio is relatively high, which is typical in the transportation industry, but it poses a risk if interest rates rise. Return on equity is impressive, showcasing effective use of shareholder funds to generate profit. The equity ratio suggests a moderate reliance on debt financing. Overall, the balance sheet is solid, though the dependency on debt is a potential risk factor.

Cash Flow

Union Pacific's cash flow statement indicates strong operational cash generation, with consistent growth in free cash flow. The operating cash flow to net income ratio is healthy, suggesting effective cash conversion from profits. The free cash flow to net income ratio is also strong, affirming the company's ability to generate cash beyond its net earnings. This robust cash flow performance supports the company's ability to manage debt and invest in growth opportunities.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
24.25B	24.12B	24.88B	21.80B	19.53B
	Gross Profit
11.04B	10.53B	11.21B	10.51B	9.18B
	EBIT
9.71B	9.08B	9.92B	9.34B	7.83B
	EBITDA
12.46B	11.93B	12.64B	11.84B	10.33B
	Net Income Common Stockholders
6.75B	6.38B	7.00B	6.52B	5.35B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.04B	1.07B	1.02B	1.01B	1.86B
	Total Assets
67.72B	67.13B	65.45B	63.52B	62.40B
	Total Debt
32.12B	34.18B	34.63B	31.16B	28.01B
	Net Debt
31.10B	33.12B	33.65B	30.20B	26.21B
	Total Liabilities
50.83B	52.34B	53.29B	49.36B	45.44B
	Stockholders Equity
16.89B	14.79B	12.16B	14.16B	16.96B
Cash Flow		Free Cash Flow
5.89B	4.77B	5.74B	6.10B	5.61B
	Operating Cash Flow
9.35B	8.38B	9.36B	9.03B	8.54B
	Investing Cash Flow
-3.33B	-3.67B	-3.47B	-2.71B	-2.68B
	Financing Cash Flow
-6.07B	-4.63B	-5.89B	-7.16B	-4.90B

Union Pacific Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 241.52
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For UNP, the sentiment is Neutral. The current price of 241.52 is below the 20-day moving average (MA) of 244.78, above the 50-day MA of 238.03, and above the 200-day MA of 235.74, indicating a neutral trend. The MACD of 1.13 indicates Positive momentum. The RSI at 47.01 is Neutral, neither overbought nor oversold. The STOCH value of 34.62 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for UNP.

Union Pacific Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
UNP	80 Outperform	$147.27B	21.79	42.60%	2.16%	0.54%	6.06%
CP	77 Outperform	$105.22B	28.33	7.76%	0.73%	15.86%	-5.49%
NSC	74 Outperform	$55.65B	21.24	18.33%	2.20%	-0.27%	43.87%
CNR	71 Outperform	$92.01B	20.92	21.13%	2.51%	1.30%	-18.15%
CSX	70 Outperform	$59.11B	17.47	28.28%	1.53%	-0.80%	―
Sector *	62 Neutral	$8.11B	13.34	1.17%	3.02%	4.16%	-15.14%

Union Pacific Corporate Events

Union Pacific Launches $1.5 Billion Share Buyback

On February 14, 2025, Union Pacific Corporation initiated accelerated share repurchase programs with Barclays Bank and Citibank to buy back $1.5 billion worth of its common stock. The transaction is expected to conclude by the end of the third quarter of 2025, with approximately 4.8 million shares initially received on February 18, 2025, impacting the company’s financial structure and market perception.