Union Pacific (UNP) AI Stock Analysis

• Market Cap: $127.62B
• Dividend Yield: 2.5%
• Average Volume (3M): 4.77M
• Price to Earnings (P/E): 18.7
• Beta (1Y): 0.75
• Revenue Growth: 1.06%
• EPS Growth: 8.13%
• Country: US
• Employees: 30,146
• Sector: Industrials
• Sector Strength: 72
• Industry: Railroads
• EPS (TTM): 3.03
• Shares Outstanding: 593,039,860
• 10 Day Avg. Volume: 4,210,667
• 30 Day Avg. Volume: 4,767,703
• PEG Ratio: 3.41
• Price to Book (P/B): 8.20
• Price to Sales (P/S): 5.71
• P/FCF Ratio: 23.51
• Enterprise Value/Market Cap: 1.33
• Enterprise Value/Revenue: 6.96
• Enterprise Value/Gross Profit: 15.23
• Enterprise Value/Ebitda: 13.43
• 1Y Price Target: $260.72
• Price Target Upside: 20.68% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 19

• Rating: 76 Outperform
• Price Target: $249.00 ▲(15.26% Upside)

Union Pacific's overall stock score is driven by strong financial performance and a positive outlook from the recent earnings call. The merger announcement adds significant strategic value. However, technical indicators suggest caution, and modest revenue growth reflects a mature growth phase.

Positive Factors

Strategic Merger

The merger with Norfolk Southern is a strategic move that will enhance Union Pacific's market position, expand its network, and unlock synergies, providing long-term competitive advantages and operational efficiencies.

Operational Efficiency

Improved operational efficiency through better freight car velocity and train speed enhances service reliability and cost management, supporting sustained profitability and customer satisfaction.

Earnings Growth

Consistent earnings growth reflects strong financial management and operational execution, providing a solid foundation for future investments and shareholder returns.

Negative Factors

Modest Revenue Growth

Modest revenue growth indicates limited expansion potential in the current market, which may constrain future earnings growth and necessitate strategic initiatives for new revenue streams.

Decline in Fuel Surcharge Revenue

The decline in fuel surcharge revenue reduces overall revenue, impacting profitability. This highlights vulnerability to fuel price fluctuations and the need for revenue diversification.

Intermodal Volume Challenges

Challenges in intermodal volumes could hinder growth in a key revenue segment, affecting overall revenue and requiring strategic adjustments to maintain competitiveness.

Union Pacific Business Overview & Revenue Model

Company Description

Union Pacific Corporation (UNP) is a leading North American transportation service provider, operating one of the largest freight railroad networks in the United States. The company primarily serves the western two-thirds of the country, offering a diverse range of transportation services that include intermodal, bulk commodities, and merchandise freight. Union Pacific plays a vital role in connecting markets and facilitating the movement of goods across various sectors, including agriculture, automotive, chemicals, coal, and industrial products.

How the Company Makes Money

Union Pacific generates revenue primarily through the transportation of freight. Its revenue model is built on several key streams: first, the movement of bulk commodities such as coal, agricultural products, and chemicals, which constitutes a significant portion of its earnings. Second, the company earns income from merchandise freight, which includes manufactured goods and consumer products. Third, intermodal services, where goods are transported in containers that can be moved seamlessly between rail and truck transport, also contribute notably to revenue. Additionally, Union Pacific has established partnerships with various industries to enhance logistics and supply chain efficiency, ensuring consistent demand for its services. Factors such as economic growth, infrastructure investments, and the overall health of the freight market significantly influence the company's earnings.

Union Pacific Financial Statement Overview

Summary

Union Pacific demonstrates strong financial performance with stable revenue growth, strong profitability, and efficient cash flow management. While leverage is moderate, strategic debt reductions could further enhance the financial standing. The company is in a mature growth phase, maintaining consistent profitability.

Income Statement

Union Pacific demonstrates strong profitability with a consistent Gross Profit Margin and Net Profit Margin over the TTM (Trailing-Twelve-Months) compared to previous years. Revenue growth is modest but stable, and EBIT and EBITDA margins indicate efficient operations. However, revenue growth has slowed slightly in recent years, suggesting a mature growth phase.

Balance Sheet

The company's balance sheet shows a healthy Equity Ratio, reflecting a reasonable proportion of equity financing. The Debt-to-Equity Ratio is moderate, indicating manageable leverage levels. Return on Equity remains strong, showcasing effective use of shareholders' funds, although there is room for improvement in reducing total debt further.

Cash Flow

Union Pacific's cash flow statements reveal a strong ability to generate operating cash flows, supported by a solid Operating Cash Flow to Net Income Ratio. The Free Cash Flow Growth Rate is positive, but capital expenditures have impacted free cash flow levels. Overall, cash flow management remains robust, with potential to enhance free cash flow through optimized capital spending.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	24.39B	24.25B	24.12B	24.88B	21.80B	19.53B
Gross Profit	11.14B	11.04B	10.53B	11.21B	10.51B	9.18B
EBITDA	12.64B	12.50B	11.93B	12.64B	11.84B	10.33B
Net Income	6.93B	6.75B	6.38B	7.00B	6.52B	5.35B
Balance Sheet
Total Assets	68.58B	67.72B	67.13B	65.45B	63.52B	62.40B
Cash, Cash Equivalents and Short-Term Investments	1.06B	1.04B	1.07B	1.02B	1.01B	1.86B
Total Debt	33.96B	32.46B	34.18B	34.96B	31.49B	28.33B
Total Liabilities	52.32B	50.83B	52.34B	53.29B	49.36B	45.44B
Stockholders Equity	16.26B	16.89B	14.79B	12.16B	14.16B	16.96B
Cash Flow
Free Cash Flow	6.26B	5.89B	4.77B	5.74B	6.10B	5.61B
Operating Cash Flow	9.86B	9.35B	8.38B	9.36B	9.03B	8.54B
Investing Cash Flow	-3.57B	-3.33B	-3.67B	-3.47B	-2.71B	-2.68B
Financing Cash Flow	-6.35B	-6.07B	-4.63B	-5.89B	-7.16B	-4.90B

Union Pacific Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 216.04
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• 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 Negative. The current price of 216.04 is below the 20-day moving average (MA) of 220.72, below the 50-day MA of 224.04, and below the 200-day MA of 227.41, indicating a bearish trend. The MACD of -1.65 indicates Positive momentum. The RSI at 40.23 is Neutral, neither overbought nor oversold. The STOCH value of 25.26 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for UNP.

Union Pacific Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NSC	79 Outperform	$61.11B	18.40	24.11%	1.97%	0.71%	86.84%
UNP	76 Outperform	$127.62B	18.69	42.35%	2.50%	1.06%	8.13%
CSX	74 Outperform	$59.75B	19.69	24.83%	1.59%	-3.27%	-10.73%
FDX	73 Outperform	$53.24B	13.42	14.68%	2.47%	0.27%	-2.64%
ODFL	71 Outperform	$30.75B	28.58	26.25%	0.75%	-5.54%	-12.26%
UPS	69 Neutral	$71.75B	12.47	34.96%	7.74%	0.94%	9.62%
Sector *	63 Neutral	$10.84B	15.28	7.40%	1.99%	2.87%	-14.59%

Union Pacific Corporate Events

Union Pacific Announces Merger with Norfolk Southern

On July 28, 2025, Union Pacific Corporation announced an Agreement and Plan of Merger with Norfolk Southern Corporation, involving a two-step merger process. This strategic move, unanimously approved by Union Pacific’s Board of Directors, aims to enhance Union Pacific’s market position by making Norfolk Southern a wholly owned subsidiary. The merger agreement outlines the conversion of Norfolk Southern’s stock into Union Pacific’s stock and cash, and includes provisions for the treatment of Norfolk Southern’s equity awards. The completion of the merger is contingent upon customary closing conditions, including shareholder and regulatory approvals. The merger is expected to significantly impact the company’s operations and industry positioning, with Norfolk Southern’s stock being delisted from the NYSE upon consummation.

Union Pacific Announces Merger with Norfolk Southern

On July 29, 2025, Union Pacific Corporation and Norfolk Southern Corporation announced a merger agreement to create America’s first transcontinental railroad. This strategic combination, valued at over $250 billion, aims to transform the U.S. supply chain, enhance freight competition, and unlock significant synergies, while preserving union jobs and promoting technological advancements.

Union Pacific in Advanced Merger Talks with Norfolk Southern

On July 24, 2025, Union Pacific Corporation and Norfolk Southern Corporation announced that they are in advanced discussions regarding a potential merger. While no agreement has been finalized, the potential business combination could significantly impact the operations and market positioning of both companies in the transportation sector.