Union Pacific (UNP) AI Stock Analysis

• Market Cap: $141.17B
• Dividend Yield: 2.26%
• Average Volume (3M): 3.08M
• Price to Earnings (P/E): 21.3
• Beta (1Y): 0.76
• Revenue Growth: 0.63%
• EPS Growth: 5.93%
• Country: US
• Employees: 30,146
• Sector: Industrials
• Sector Strength: 86
• Industry: Railroads
• EPS (TTM): 2.70
• Shares Outstanding: 597,475,600
• 10 Day Avg. Volume: 3,254,245
• 30 Day Avg. Volume: 3,080,826
• PEG Ratio: 1.46
• Price to Book (P/B): 10.60
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 22.46
• Enterprise Value/Market Cap: 1.15
• Enterprise Value/Revenue: 1.68
• Enterprise Value/Gross Profit: 14.74
• Enterprise Value/Ebitda: 3.28
• 1Y Price Target: $249.17
• Price Target Upside: 5.46% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 23

• Rating: 71 Outperform
• Price Target: $247.00 ▲(4.54%Upside)

Union Pacific exhibits solid financial performance with strong cash flow and profitability, although moderate leverage is a concern. Technical analysis indicates stable momentum, while valuation metrics suggest the stock is fairly valued. Earnings call insights highlight operational strengths but caution against external risks, resulting in a balanced overall outlook.

Positive Factors

Financial Performance

Union Pacific's execution has improved, positioning it better than most peers to weather demand challenges and capitalize on recovery.

Strategic Opportunities

Union Pacific has signaled openness to strategic opportunities and believes a transcontinental merger would be beneficial for customers.

Volume Growth

Union Pacific carloads are up 4% year-over-year, driven by strong performance in coal and grain sectors.

Negative Factors

Earnings

Union Pacific's 1Q EPS of $2.70 fell short of the $2.74 consensus and $2.78 estimate due to a lower top line.

Regulatory Challenges

Union Pacific sees significant political hurdles and regulatory issues due to 2001 STB merger rules requiring acquisitions to enhance competition and be in public interest.

Revenue Impact

Despite strong pricing and 2.7% growth in RTMs, revenues were flat year-over-year due to the negative impact from lower fuel revenues and mix.

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 products, and coal and renewables to grain processors, animal feeders, ethanol producers, and other agricultural users; petroleum, and liquid petroleum gases; and construction products, industrial chemicals, plastics, forest products, specialized products, metals and ores, soda ash, and sand, as well as finished automobiles, automotive parts, and merchandise in intermodal containers. As of December 31, 2021, its rail network included 32,452 route miles connecting Pacific Coast and Gulf Coast ports with the Midwest and Eastern United States gateways. The company was founded in 1862 and is headquartered in Omaha, Nebraska.

How the Company Makes Money

Union Pacific makes money through its core business of rail transportation. The company's revenue is primarily derived from the transportation of freight across its extensive rail network. Key revenue streams include the shipment of goods in sectors such as agricultural products (grains, food, and beverages), automotive (finished vehicles and parts), chemicals (industrial chemicals and plastics), coal (for utilities and industrial customers), and industrial products (construction materials, metals, and forest products). Additionally, its intermodal segment, which combines rail and trucking services to transport shipping containers, plays a significant role in revenue generation. Union Pacific also benefits from strategic partnerships with key players in various industries, enhancing its service offerings and expanding its market reach. The company's profitability is supported by its focus on operational efficiency, cost management, and investment in infrastructure improvements.

Union Pacific Financial Statement Overview

Summary

Union Pacific demonstrates strong financial performance with robust profitability and cash flow metrics. The income statement shows efficient cost management and stable margins, though revenue growth has been inconsistent. The balance sheet indicates moderate leverage, requiring monitoring of debt levels. Overall, effective operational efficiency and strong cash flow generation highlight financial stability.

Income Statement

Union Pacific shows strong profitability with a consistent gross profit margin and net profit margin. The TTM gross profit margin is 45.57%, and the net profit margin is 28.02%, indicating efficient cost management. However, revenue growth has been somewhat inconsistent, with a slight decline in the latest period compared to previous years. Despite this, EBIT and EBITDA margins remain robust, highlighting stable operational efficiency.

Balance Sheet

The company's balance sheet reflects moderate leverage, with a debt-to-equity ratio of 0.19 in the TTM period. ROE is strong at 31.84%, indicating effective use of equity. However, the equity ratio of 23.42% suggests a reliance on debt financing. Overall, the balance sheet shows a mix of strengths in profitability but potential risk from leverage.

Cash Flow

Union Pacific's cash flow is robust, with a TTM free cash flow of $4.57 billion, reflecting strong cash generation. The operating cash flow to net income ratio is 1.41, demonstrating efficient conversion of profits to cash. The free cash flow to net income ratio is favorable at 0.90, indicating healthy cash retention post-capital expenditures.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	24.25B	24.25B	24.12B	24.88B	21.80B	19.53B
Gross Profit	11.03B	11.04B	10.53B	11.21B	10.51B	9.18B
EBITDA	12.48B	12.50B	11.93B	12.64B	11.84B	10.33B
Net Income	6.73B	6.75B	6.38B	7.00B	6.52B	5.35B
Balance Sheet
Total Assets	68.49B	67.72B	67.13B	65.45B	63.52B	62.40B
Cash, Cash Equivalents and Short-Term Investments	1.41B	1.04B	1.07B	1.02B	1.01B	1.86B
Total Debt	33.90B	32.46B	34.18B	34.63B	31.16B	28.01B
Total Liabilities	52.45B	50.83B	52.34B	53.29B	49.36B	45.44B
Stockholders Equity	16.04B	16.89B	14.79B	12.16B	14.16B	16.96B
Cash Flow
Free Cash Flow	5.87B	5.89B	4.77B	5.74B	6.10B	5.61B
Operating Cash Flow	9.43B	9.35B	8.38B	9.36B	9.03B	8.54B
Investing Cash Flow	-3.46B	-3.33B	-3.67B	-3.47B	-2.71B	-2.68B
Financing Cash Flow	-5.49B	-6.07B	-4.63B	-5.89B	-7.16B	-4.90B

Union Pacific Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 236.28
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For UNP, the sentiment is Positive. The current price of 236.28 is above the 20-day moving average (MA) of 226.98, above the 50-day MA of 222.68, and above the 200-day MA of 231.57, indicating a bullish trend. The MACD of 3.30 indicates Negative momentum. The RSI at 67.27 is Neutral, neither overbought nor oversold. The STOCH value of 90.87 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for UNP.

Union Pacific Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NSC	78 Outperform	$59.18B	17.93	24.52%	2.06%	0.70%	135.08%
FAST	77 Outperform	$48.96B	42.58	32.35%	4.12%	3.08%	-0.76%
UPS	74 Outperform	$88.18B	15.19	35.96%	6.21%	1.30%	-0.76%
CSX	73 Outperform	$63.12B	20.02	26.13%	1.55%	-2.39%	-7.80%
ODFL	72 Outperform	$35.89B	31.84	26.59%	0.66%	-2.63%	-6.12%
UNP	71 Outperform	$141.17B	21.29	42.47%	2.26%	0.63%	5.93%
Sector *	67 Neutral	€8.39B	18.63	6.19%	2.67%	2.39%	-39.55%

Union Pacific Corporate Events

Union Pacific Announces Leadership Changes in May 2025

Union Pacific announced that its President, Elizabeth F. Whited, will transition to a strategic advisor role effective July 1, 2025, after serving as the company’s first female president. Her leadership has been instrumental in guiding the company through transformative changes and historic initiatives. Additionally, Todd M. Rynaski will transition to Senior Vice President-Strategy, and Carrie J. Powers has been appointed as the new Vice President, Controller, and Chief Accounting Officer, effective immediately.

Union Pacific Shareholders Approve Key Proposals at Annual Meeting

At Union Pacific Corporation’s Annual Meeting of Shareholders on May 8, 2025, shareholders voted on several key proposals. The election of directors for a one-year term was approved, with all nominated directors elected. Deloitte & Touche LLP was ratified as the independent registered public accounting firm for 2025. Additionally, the advisory vote on executive compensation was approved, while a shareholder proposal for an amended clawback policy was rejected.