UNP

Of course. Here is a comprehensive analysis of Union Pacific (UNP).

**Technical Analysis**

UNP has recently underperformed the broader market, showing modest price declines over the past one and three months. This suggests a period of consolidation or weaker momentum. Currently trading near the middle of its 52-week range, the stock appears neither technically overbought nor oversold, but its significant maximum drawdown of -18% highlights the volatility it has experienced.

**Fundamental Analysis**

The company's core operations are financially sound, demonstrating strong profitability with an operating income margin of 40.8%. However, UNP carries a high level of debt, as shown by its debt-to-equity ratio of 1.90, which is common but notable in the capital-intensive railroad industry. Its operational efficiency is moderate, with a respectable return on equity supported by its use of leverage.

**Valuation and Risk**

UNP's valuation presents a concern, as its price-to-earnings ratio of 19.3 and exceptionally high EV/EBITDA ratio of 52.7 suggest the stock is priced at a significant premium. The stock's beta of 1.0 indicates it has market-average volatility, meaning it is susceptible to broader economic swings. The lack of significant short interest points to a general market consensus on its current price level.

**Investment Recommendation**

Based on the analysis, a HOLD recommendation is appropriate for existing investors. While Union Pacific's underlying business is profitable and stable, its current valuation appears rich, pricing in significant future growth. For new investors, it may be prudent to wait for a more attractive entry point or clearer signs of accelerating operational performance that could justify its premium multiples. The stock's market-average volatility suggests it is unlikely to dramatically outperform without a positive shift in fundamentals.

RockFlow Model Forecast: Three Scenarios for 2026

Based on the provided analysis, here is a 12-month outlook for Union Pacific (UNP):

12-Month Outlook for UNP:

Union Pacific's outlook is neutral-to-cautious, largely contingent on its ability to translate its high profitability into growth that justifies its premium valuation. Key catalysts for an upward move would be a meaningful improvement in freight volume, particularly in intermodal and industrial sectors, coupled with operational efficiencies that boost its returns. The primary risk is the broader economic environment; any signs of an economic slowdown would likely pressure freight demand and expose the stock's current valuation as stretched. Given the lack of an analyst target, a prudent 12-month target range would be near the current price, roughly between $220 and $250, reflecting the stock's current consolidation phase and the balance between its strong fundamentals and rich valuation.

Wall Street Consensus

Most Wall Street analysts are optimistic about UNP's 12-month outlook, with consensus target around $227.14, indicating expected upside potential.

Overall, UNP has investment potential but also faces challenges. Here are key factors to weigh before investing.

UNP has demonstrated moderate weakness with a slight underperformance relative to the market over the recent period. The stock's modest negative returns over the past one and three months, coupled with its negative relative strength, indicate a period of consolidation or subdued momentum compared to broader market indices.

Short-term performance shows a mild decline, with UNP falling approximately 3% over the past month and nearly 1% over the past quarter. This underperformance relative to the market, as indicated by the -4.34% relative strength, suggests the stock has faced headwinds despite its beta of approximately 1.0 implying market-average volatility.

Currently trading at $229.29, UNP sits roughly in the middle of its 52-week range ($204.66 - $256.84), indicating it is neither overbought nor oversold based on this metric. However, the significant 52-week maximum drawdown of -18.14% highlights the substantial volatility experienced during the past year.

Of course. Here is a fundamental analysis of Union Pacific Corporation (UNP) based on the provided data.

1. Revenue & Profitability

UNP demonstrates solid profitability with consistent margins. For Q3 2025, the company achieved a gross profit margin of 46.5% and a robust operating income margin of 40.8%, indicating strong control over its core operating costs. The net income margin of 28.6% is healthy, and while diluted EPS dipped slightly from $3.15 in Q2 to $3.01 in Q3, the company maintains efficient conversion of revenue into bottom-line profit.

2. Financial Health

The company's financial health is characterized by significant leverage, which is common in the capital-intensive railroad industry. The debt-to-equity ratio of 1.90 indicates a high level of debt financing relative to shareholder equity. However, this leverage is managed effectively, as evidenced by a strong interest coverage ratio of 7.8, implying the company generates ample operating income to service its debt obligations. The relatively low current and quick ratios suggest a focus on working capital efficiency rather than maintaining high liquid assets.

3. Operational Efficiency

UNP exhibits moderate operational efficiency. The return on equity (ROE) of 10.3% is respectable but is amplified by a high equity multiplier (~3.97), reflecting the use of debt. The asset turnover ratio of 0.091 is low, which is typical for asset-heavy businesses like railroads, indicating that it generates a smaller amount of sales per dollar of assets. The cash conversion cycle of approximately 26 days demonstrates effective management of receivables, inventory, and payables, contributing to steady operating cash flow.

UNP's valuation metrics present a mixed picture. The stock trades at a TTM and forward P/E ratio of approximately 19.3, which is high for a railroad company and suggests a premium valuation. This is further supported by elevated price-to-sales (5.54) and price-to-book (7.86) ratios. The significantly negative PEG ratio and an extremely high EV/EBITDA of 52.7 are major concerns, indicating that the market's growth expectations are exceptionally high relative to the company's earnings trajectory or that earnings are in decline.

A peer comparison cannot be conducted as industry average data is not available. Therefore, the valuation assessment is based solely on absolute metrics. Given the high multiples, particularly the negative PEG and extraordinarily high EV/EBITDA, the stock appears to be richly valued and carries significant risk if the anticipated growth fails to materialize.

Of course. Here is a risk analysis for UNP based on the provided metrics.

1. Volatility Risk UNP's beta of approximately 1.0 indicates that its stock price volatility is expected to move in near lockstep with the broader market. An investor should anticipate market-average swings. The 1-year maximum drawdown of -18.14% provides a concrete example of this volatility, showing the stock experienced a significant peak-to-trough decline, which is consistent with broader market corrections during the same period. This reinforces that UNP is not insulated from systemic market risk.

2. Other Risks The negligible short interest suggests a strong market consensus regarding UNP's fair valuation or positive outlook, with very few investors actively betting on a price decline. This significantly reduces the near-term risk of a short squeeze or amplified selling pressure from that segment. However, this does not eliminate fundamental risks inherent to its railroad operations, such as economic cyclicality, regulatory changes, and labor relations, which could impact performance irrespective of technical market factors.