Union Pacific Corporation (UNP)
Industrials · $175B market cap · SEC CIK 0000100885
ahead of 72% of the S&P 500 · #19 of 79 in Industrials
Next reports on Jan 25, 2027, after the close, with analysts expecting $3.35 in earnings per share.
52-week range $218.20 to $315.99. 5% below its 52-week high and 38% above its low.
The case for UNP
- Earns 38% back on shareholder equity.
- Generated $5.5B of free cash flow in FY2025, 22% of revenue.
- 29% of revenue drops through to net profit.
- Gross margin of 77% absorbs cost shocks.
- Pays a modest 2.3% dividend.
The case against
- Priced at 6.6× sales with revenue growing only 7.4%.
- Long-term debt of $31.8B against $1.3B of cash.
What the score is made of
Each factor is half a curve over reported figures and half a rank among the other Industrials companies (momentum is judged against fixed thresholds only), and the five are blended by weight. The score is where that blend places it in the S&P 500. It describes the last filing and the current price. It is not a forecast.
| Valuewhat you pay for the earnings and cash, against the growth you get | 44 |
|---|---|
| Growthhow fast revenue and earnings are moving, this year and over five | 43 |
| Profitabilityhow much of the revenue becomes profit, and how much of that is cash | 87 |
| Momentumhow the price has behaved lately | 73 |
| Stabilityhow violently it moves, what it owes and what it pays you | 62 |
- Each factor except momentum is half fixed thresholds, half rank among the 79 Industrials companies.
The financials
Revenue growth
Is the business growing? Slowly
| Last 12 months | +7.4% |
|---|---|
| Over 5 years | +4.6% a year |
| FY2025 revenue | $24.5B (+1%) |
Free cash flow
Is it generating real cash? Yes, plenty
| FY2025 free cash flow | $5.5B |
|---|---|
| Of revenue | 22% |
| Of profit | 77% |
Profit margins
Is profitability improving? Yes, improving
| Gross margin | 77% |
|---|---|
| Operating margin | 40% |
| Net margin, FY24 → FY25 → now | 27.8% → 29.1% → 28.9% |
Debt vs. cash
Is the balance sheet healthy? Mostly, with some debt to carry
| Cash | $1.3B |
|---|---|
| Long-term debt | $31.8B |
| Net debt | $30.5B |
| Years to repay | 3.4 yrs |
Valuation
Is the stock price reasonable? Yes, about fair
| P/E | 23.0× |
|---|---|
| Fair P/E for its growth | 22× |
| P/FCF | 31.8× |
| Forward P/E | 21.4× |
| EV / EBITDA | 15.5× |
At 23.0× earnings it trades close to the 22× that 7% a year of growth plus a 2.3% dividend would justify. At 31.8× free cash flow it trades above that same mark.
The financials, five years deep
Pulled from Union Pacific Corporation's XBRL filings on SEC EDGAR. Italic rows are worked out from the others.
| FY2025 | FY2024 | FY2023 | FY2022 | FY2021 | |
|---|---|---|---|---|---|
| Revenue growth | |||||
| Revenue | $24.5B | $24.3B | $24.1B | $24.9B | $21.8B |
| Change on the year | +1% | +1% | −3% | +14% | — |
| Free cash flow | |||||
| Free cash flow | $5.5B | $5.9B | $4.8B | $5.7B | $6.1B |
| Of revenue | 22% | 24% | 20% | 23% | 28% |
| Profit margins | |||||
| Operating margin | 40.2% | 40.1% | 37.7% | 39.9% | 42.8% |
| Net margin | 29.1% | 27.8% | 26.4% | 28.1% | 29.9% |
| Debt vs. cash | |||||
| Cash | $1.3B | $1.0B | $1.1B | $973M | $960M |
| Long-term debt | $31.8B | $31.2B | $32.6B | $33.3B | $29.7B |
| Net cash (debt) | −$30.5B | −$30.2B | −$31.5B | −$32.4B | −$28.8B |
What Union Pacific Corporation says it does
Union Pacific Railroad Company is the principal operating company of Union Pacific Corporation. One of America's most recognized companies, Union Pacific Railroad Company connects 23 states in the western two-thirds of the country by rail, providing a critical link in the global supply chain. The Railroad’s diversified business mix includes Bulk, Industrial, and Premium. Union Pacific serves many of the fastest-growing U.S. population centers, operates from all major West Coast and Gulf Coast ports to Eastern gateways, connects with Canada's rail systems, and is the only railroad serving all six major Mexico gateways. Union Pacific provides value to customers by delivering products in a safe, reliable, fuel-efficient, and environmentally responsible manner. Union Pacific Corporation was incorporated in Utah in 1969 and maintains its principal executive offices at 1400 Douglas Street, Omaha, NE 68179. The telephone number at that…
Risk factors UNP lists in its 10-K
- We must manage fluctuating demand for our services and network capacity
- The ability to update or maintain technology could adversely affect our operations
- We are subject to cybersecurity risks
- Severe weather and natural events could result in significant business interruptions and expenditures
- A significant portion of our revenues involves transportation of commodities to and from international markets
- We are dependent on certain key suppliers of locomotives and rail
- Strikes or work stoppages could adversely affect our operations
- The availability of qualified personnel could adversely affect our operations
- We are subject to significant governmental regulation
- We may be subject to various claims and lawsuits that could result in significant expenditures
- We are subject to significant environmental laws and regulations
- We face competition from other railroads and other transportation providers
- We may be affected by climate change and market or regulatory responses to climate change
- Our business, financial condition, and results of operations have been adversely affected, and in the future, could be materially adversely affected by pandemics or other public health crises
- We are affected by fluctuating fuel prices
- 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 —
- The merger agreement contains provisions that limit our ability to pursue alternatives to the mergers, and, in specified circumstances, could require us to pay substantial termination fees to Norfolk Southern —
- We may and have been a target of securities class action and derivative lawsuits that could result in substantial costs and may delay or prevent the mergers from being completed, whether or not such lawsuits have any merit —
- The combined company may be unable to successfully integrate the businesses of the Company and Norfolk Southern and realize the anticipated benefits of the mergers —
- The future results of the combined company may be adversely impacted if the combined company does not effectively manage its expanded operations following the completion of the mergers —
- The combined company is expected to incur substantial expenses related to the completion of the mergers and the integration of the Company and Norfolk Southern —
- The combined company’s indebtedness may limit its flexibility and increase its borrowing costs —
- We are affected by general economic conditions
- We may be affected by acts of terrorism, war, or risk of war