Union Pacific Corp. (UNP)
NYSE:UNP
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Union Pacific
(NYSE:UNP)
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Rating:73Outperform
Price Target:
$261.00
â–²(9.30% Upside)
Action:UpgradedDate:02/12/26
The score is driven primarily by strong financial fundamentals (high profitability and solid cash generation) despite leverage and recent top-line weakness. Technicals are supportive with strong trend momentum but look overbought. Valuation is reasonable but not cheap, while the earnings call was constructive on 2026 EPS and operating ratio improvement, tempered by cost inflation, volume/mix headwinds, and merger-related regulatory uncertainty.
Positive Factors
Cash generation & profitability
Union Pacific’s consistent high margins and dependable operating cash flow create durable internal funding for capital expenditure, dividends and strategic investments. Over time steady OCF supports reinvestment in network productivity, funds debt servicing and cushions cyclical freight volatility without relying on external financing.
Negative Factors
Recent revenue decline
A meaningful 2025 revenue decline reflects weakening volumes and adverse mix in higher‑yield segments. Persistent top-line compression would erode operating leverage, pressure margins over time, and limit the company’s ability to expand service or invest without offsetting pricing or cost gains.
Read all positive and negative factors
Positive Factors
Negative Factors
Cash generation & profitability
Union Pacific’s consistent high margins and dependable operating cash flow create durable internal funding for capital expenditure, dividends and strategic investments. Over time steady OCF supports reinvestment in network productivity, funds debt servicing and cushions cyclical freight volatility without relying on external financing.
Read all positive factors
Union Pacific (UNP) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$141.70B
Dividend Yield2.32%
Average Volume (3M)3.13M
Price to Earnings (P/E)19.2
Beta (1Y)0.63
Revenue Growth1.06%
EPS Growth8.21%
CountryUS
Employees30,146
SectorIndustrials
Sector Strength72
IndustryRailroads
Share Statistics
EPS (TTM)2.86
Shares Outstanding593,391,500
10 Day Avg. Volume2,917,196
30 Day Avg. Volume3,126,517
Financial Highlights & Ratios
PEG Ratio2.34
Price to Book (P/B)7.42
Price to Sales (P/S)5.59
P/FCF Ratio24.92
Enterprise Value/Market Cap1.22
Enterprise Value/Revenue7.03
Enterprise Value/Gross Profit15.38
Enterprise Value/Ebitda13.30
Forecast
1Y Price Target
$278.36Price Target Upside16.57% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering15
EPS Forecast (FY)12.47
Revenue Forecast (FY)$25.37B
Union Pacific Business Overview & Revenue Model
Company Description
Union Pacific Corporation, through its subsidiary, Union Pacific Railroad Company, operates in the railroad business in the United States. The company offers transportation services for grain and grain products, fertilizers, food and refrigerated ...
How the Company Makes Money
Union Pacific primarily makes money by charging customers to move freight on its rail network. Revenue is generated from contractual transportation rates and related charges tied to shipment volume, distance (miles moved), service type, equipment ...
Union Pacific Key Performance Indicators (KPIs)
Any
Locomotive Productivity
Measures the efficiency of locomotive usage, indicating how well the company utilizes its fleet to transport goods. Higher productivity suggests better asset utilization and cost management, impacting profitability.
Measures the efficiency of locomotive usage, indicating how well the company utilizes its fleet to transport goods. Higher productivity suggests better asset utilization and cost management, impacting profitability.
Data provided by:
The Fly
The FlyUnion Pacific Earnings Call Summary
Earnings Call Date:Jan 27, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 23, 2026
Earnings Call Sentiment Positive
The call emphasized multiple operational and financial record achievements (net income, EPS, productivity, safety, freight revenue ex-fuel, domestic intermodal, cash returned to shareholders and ROIC) and management presented a confident, execution-focused outlook. At the same time, there are clear near-term headwinds: Q4 volume softness (especially international intermodal), mix pressure, rising operating costs (including merger-related and inflation-driven expense increases), and regulatory uncertainty around the merger which pauses some capital actions. Management expects mid-single-digit EPS growth in 2026, plans targeted capital investment ($3.3B) to support productivity, and reiterated commitment to improving the operating ratio despite a softer macro environment.Positive Updates
Record Full-Year Profitability
2025 reported net income of $7.1 billion, up 6% year-over-year, and reported EPS of $11.98, up 8%; full-year adjusted operating ratio improved 60 basis points to 59.3% versus 2024.
Negative Updates
Quarterly Volume and Revenue Pressures
Q4 freight revenue declined 1% to $5.8 billion on a 4% volume decline; lower quarterly volume reduced freight revenue by ~400 basis points while fuel surcharge added ~75 basis points and pricing/mix contributed ~275 basis points.
Read all updates
Q4-2025 Updates
Positive
Negative
Record Full-Year Profitability
2025 reported net income of $7.1 billion, up 6% year-over-year, and reported EPS of $11.98, up 8%; full-year adjusted operating ratio improved 60 basis points to 59.3% versus 2024.
Read all positive updates
Company Guidance
Union Pacific guided 2026 to mid‑single‑digit EPS growth off 2025's reported $11.98 per share, with an expectation to improve the operating ratio versus 2025’s adjusted OR of 59.3% (Q4 adj. OR 60%) and to remain industry‑leading on ROIC (2025 ROIC 16.3%). Management plans roughly $3.3 billion of 2026 capital spending, expects all‑in compensation per employee to rise ~4–5% amid rail inflation of slightly over 4%, will prioritize paying $1.5 billion of long‑term debt due in H1 then conserve cash for the merger, and anticipates cash balances growing after 2025’s $9.3 billion of cash from operations (with $5.9 billion returned to shareholders in 2025); share buybacks are paused while dividends will continue to be increased, and adjusted net debt/EBITDA finished 2025 at ~2.7x.Union Pacific Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
67
Positive
Cash Flow
74
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 24.51B | 24.25B | 24.12B | 24.88B | 21.80B |
| Gross Profit | 14.55B | 11.04B | 10.53B | 11.21B | 10.51B |
| EBITDA | 12.95B | 12.50B | 11.93B | 12.64B | 11.84B |
| Net Income | 7.14B | 6.75B | 6.38B | 7.00B | 6.52B |
Balance Sheet | |||||
| Total Assets | 69.70B | 67.72B | 67.13B | 65.45B | 63.52B |
| Cash, Cash Equivalents and Short-Term Investments | 1.52B | 1.04B | 1.07B | 1.02B | 1.01B |
| Total Debt | 31.81B | 32.46B | 34.18B | 34.96B | 31.49B |
| Total Liabilities | 51.23B | 50.83B | 52.34B | 53.29B | 49.36B |
| Stockholders Equity | 18.47B | 16.89B | 14.79B | 12.16B | 14.16B |
Cash Flow | |||||
| Free Cash Flow | 5.50B | 5.89B | 4.77B | 5.74B | 6.10B |
| Operating Cash Flow | 9.29B | 9.35B | 8.38B | 9.36B | 9.03B |
| Investing Cash Flow | -3.76B | -3.33B | -3.67B | -3.47B | -2.71B |
| Financing Cash Flow | -5.28B | -6.07B | -4.63B | -5.89B | -7.16B |
Union Pacific Technical Analysis
Negative
238.79
Price Trends
247.02
Negative
237.35
Positive
229.86
Positive
Market Momentum
-3.97
Positive
38.33
Neutral
56.76
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 238.79 is below the 20-day moving average (MA) of 247.14, below the 50-day MA of 247.02, and above the 200-day MA of 229.86, indicating a neutral trend. The MACD of -3.97 indicates Positive momentum. The RSI at 38.33 is Neutral, neither overbought nor oversold. The STOCH value of 56.76 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for UNP.
Union Pacific Risk Analysis
Union Pacific disclosed 31 risk factors in its most recent earnings report. Union Pacific reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 3 New Risks
1.
The combined company's indebtedness may limit its flexibility and increase its borrowing costs - Q4, 2025
2.
The financing arrangements that the combined company will enter into in connection with the mergers may, under certain circumstances, contain restrictions and limitations that could significantly impact the combined company's ability to operate its business - Q4, 2025
3.
The mergers are subject to conditions, some or all of which may not be satisfied or completed on a timely basis, if at all. Failure to complete the mergers could have material adverse effects on our business - Q4, 2025
Union Pacific Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | C$86.10B | 17.92 | 21.95% | 2.62% | 0.23% | -13.22% | |
73 Outperform | $141.70B | 19.20 | 41.95% | 2.32% | 1.06% | 8.21% | |
70 Outperform | C$97.53B | 22.36 | 8.90% | 0.82% | 4.02% | 21.39% | |
69 Neutral | $19.45B | 31.73 | 16.33% | 0.89% | -1.60% | 4.87% | |
68 Neutral | $63.61B | 22.59 | 19.16% | 1.85% | 0.48% | 22.88% | |
67 Neutral | $73.77B | 23.39 | 22.90% | 1.42% | -3.80% | -17.32% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
UNP
Union Pacific
238.79
7.99
3.46%
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140.82
4.33
3.17%
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108.64
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CSX
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205.59
59.25
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NSC
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283.25
51.13
22.03%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.