Union Pacific Corp.
UNP
$242.62
+1.42%
Union Pacific Corp. is the largest public railroad in North America, operating in the western two-thirds of the United States. It is a dominant player in the freight rail industry with a vast, strategic network and a significant stake in the Mexican railroad Ferromex.
UNP
Union Pacific Corp.
$242.62
Investment Opinion: Should I buy UNP Today?
Based on a synthesis of the fundamental data, valuation, and market context, the objective assessment for Union Pacific is a Hold. The company's stellar profitability metrics (30%+ net margin, 39% ROE) and strong free cash flow underscore its quality and competitive moat. However, the lack of revenue growth, high debt level, and premium valuation (P/E ~19x, PEG >2) limit near-term upside potential. The stock is not significantly overvalued but lacks a clear catalyst for outperformance in the next 12 months, making it suitable for existing shareholders but not a compelling new buy at this level.
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UNP 12-Month Price Forecast
The analysis indicates a high-quality company in a no-growth environment. The strong fundamentals are offset by cyclical risks and leverage, leading to a neutral outlook with a high probability of range-bound trading.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Union Pacific Corp.'s 12-month outlook, with a consensus price target around $315.41 and implied upside of +30.0% versus the current price.
Average Target
$315.41
3 analysts
Implied Upside
+30.0%
vs. current price
Analyst Count
3
covering this stock
Price Range
$194 - $315
Analyst target range
Analyst consensus data, including a specific target price and ratings distribution, is not provided in the inputs. The available data shows three analysts providing estimates, with an average EPS estimate of $19.60 for an unspecified period. Recent institutional ratings include actions such as upgrades to 'Outperform' from Evercore ISI and Baird, and a downgrade to 'Market Perform' from BMO Capital. No sufficient analyst coverage data is available to summarize a clear consensus target price.
Bulls vs Bears: UNP Investment Factors
Union Pacific is a financially robust industry leader with exceptional profitability and cash generation. However, it faces headwinds from stagnant revenue, high leverage, and economic cyclicality. The stock's recent pullback presents a more attractive entry point for a high-quality, dividend-paying industrial.
Bullish
- Dominant Market Position: Largest public railroad in North America with a strategic, extensive network.
- Exceptional Profitability: High net margin of 29.1% and ROE of 38.7% indicate efficient operations.
- Strong Free Cash Flow: $5.5B TTM FCF supports dividends, buybacks, and capital investments.
- Attractive Valuation: Forward P/E of 17.7 is reasonable given the company's quality and stability.
Bearish
- Revenue Stagnation: Q4 2025 revenue declined 0.6% YoY, indicating potential demand weakness.
- High Debt Load: Debt-to-equity of 1.72 is elevated, increasing financial risk.
- Economic Sensitivity: Freight volumes are cyclical and tied to broader economic health.
- Recent Price Weakness: Stock down 9.7% over the past month, underperforming the S&P 500.
UNP Technical Analysis
The stock's overall trend has been volatile but positive over the last six months, with the price rising from approximately $231.32 on December 31, 2025, to $239.23 on March 30, 2026, representing a 6-month gain of about 3.4%. In the short term, the stock declined 9.72% over the past month, underperforming the S&P 500's 7.87% drop, but gained 2.65% over the past three months, significantly outperforming the market's 7.32% decline. The current price of $239.23 sits near the middle of its 52-week range of $204.66 to $268.14, indicating it is not at an extreme high or low, though it has retreated from its recent peak near $267 in late February.
Beta
0.95
0.95x market volatility
Max Drawdown
-16.5%
Largest decline past year
52-Week Range
$205-$268
Price range past year
Annual Return
+2.7%
Cumulative gain past year
| Period | UNP Return | S&P 500 |
|---|---|---|
| 1m | -8.4% | -5.3% |
| 3m | +4.9% | -4.6% |
| 6m | +3.5% | -2.8% |
| 1y | +2.7% | +15.9% |
| ytd | +4.6% | -4.6% |
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UNP Fundamental Analysis
Revenue in Q4 2025 was $6.085 billion, showing a slight year-over-year decline of 0.59% from Q4 2024. Profitability remains strong with a net margin of 30.4% in the latest quarter, and the trailing twelve-month net margin is reported at 29.1%. The company's financial health shows a high debt-to-equity ratio of 1.72, but it maintains a robust free cash flow of $5.5 billion (TTM), which supports dividends and capital expenditures. Operational efficiency is highlighted by a high return on equity of 38.65% and a return on assets of 9.07%, indicating effective use of shareholder capital and assets.
Quarterly Revenue
$6.1B
2025-12
Revenue YoY Growth
+0.00%
YoY Comparison
Gross Margin
+0.44%
Latest Quarter
Free Cash Flow
$5.5B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is UNP Overvalued?
Given the company's positive net income, the trailing P/E ratio of 19.2 is the primary valuation metric. This P/E is slightly above the forward P/E of 17.7, suggesting modest earnings growth expectations. Peer comparison data is not available in the provided inputs, so a relative valuation against industry averages cannot be performed.
PE
19.2x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range 16x~27x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
12.9x
Enterprise Value Multiple
Investment Risk Disclosure
Union Pacific's primary risks are financial and macroeconomic. The company carries a significant debt burden with a debt-to-equity ratio of 1.72, which could pressure financial flexibility if interest rates rise or earnings decline. As a railroad, its fortunes are closely tied to the health of the industrial and agricultural economy; a recession would likely lead to a sharp drop in freight volumes and revenue. The recent quarterly revenue decline of 0.6% year-over-year may be an early sign of such softening demand. Operational risks include potential regulatory changes, labor disputes, and the ongoing need for substantial capital expenditures to maintain its vast network. The stock also exhibits market risk, with a beta of 0.95, indicating it generally moves with the market but recently showed heightened volatility, falling nearly 10% in a month.
FAQ
The key risks are macroeconomic sensitivity, financial leverage, and operational challenges. As a railroad, UNP's revenue is highly cyclical and would suffer in an economic downturn. Its high debt-to-equity ratio of 1.72 increases financial risk if earnings decline. Other risks include rising fuel and labor costs, regulatory changes, and the capital-intensive nature of maintaining its rail network.
The 12-month outlook is for range-bound trading with a neutral bias. The base case (60% probability) sees the stock trading between $230 and $260, around its current price, as stable cash flows support the valuation. A bull case (25%) could see a retest of the 52-week high near $268, while a bear case (15%) could see a decline toward the 52-week low of $205 if the economy weakens.
UNP appears fairly valued. Its trailing P/E of 19.2 is slightly above the forward P/E of 17.7, indicating modest earnings growth expectations. While the PEG ratio of 2.34 suggests the stock is priced for more growth than it is currently delivering, the premium is justified by the company's industry dominance and high return on equity of 38.7%. It is not significantly overvalued or undervalued.
UNP is a high-quality stock but not a compelling buy at this moment. Its exceptional profitability (29% net margin) and strong cash flow are positives, but stagnant revenue growth and high debt (D/E 1.72) are concerns. The forward P/E of 17.7 is reasonable, but the stock lacks a clear catalyst for significant upside, making it more suitable for a watchlist than immediate purchase.
UNP is far more suitable for long-term investment. Its value proposition is based on durable competitive advantages, consistent dividend payments (2.36% yield), and compounding cash flows over time. Short-term traders may be frustrated by its cyclicality and lack of volatility. Patient investors can benefit from its stability and income while waiting for economic cycles to turn favorable.