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1. Company Snapshot

1.a. 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.

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1.b. Last Insights on UNP

Union Pacific Corporation's recent performance was driven by a strong operational turnaround under new leadership, resulting in record efficiency, improved service, and regained lost business. The company's core pricing power, rising volumes, and disciplined cost control support a more bullish outlook than last year. Strong cash generation, consistent dividend growth, and robust buybacks highlight Union Pacific's shareholder-friendly capital return strategy and financial discipline. The company's recent Q2 earnings beat expectations, with improved freight velocity, a lower operating ratio, and robust EPS growth supporting continued shareholder value creation. Strategic investments and a potential merger with Norfolk Southern could unlock further growth, network synergies, and accelerated earnings expansion.

1.c. Company Highlights

2. Union Pacific's Q4 2025 Earnings: A Strong Finish to a Record-Breaking Year

Union Pacific reported a net income of $7.1 billion for the full year 2025, up 6% year-over-year, with earnings per share (EPS) of $11.98, up 8%. The company's freight revenue, excluding fuel surcharge, grew 3% versus 2024, setting a best-ever full-year record. In the fourth quarter, operating revenue was $6.1 billion, down 1% year-over-year, while freight revenue was $5.8 billion, down 1%. EPS for the quarter was $2.86, in line with analyst estimates.

Publication Date: 08:18

📋 Highlights
  • Financial Performance: Union Pacific reported $7.1 billion net income (up 6%) and $11.98 EPS (up 8%), with 3% growth in freight revenue excluding fuel surcharge.
  • Weather Recovery: Southern region recovery reached 70% of impacted areas, while northern and central regions achieved "spectacular" recovery, utilizing resource buffers for safe operations.
  • Merger Outlook: Anticipates $2 billion in revenue gains from the Norfolk Southern merger, including 2 million carload growth and a 6% increase in operating inventory post-merger.
  • 2026 Earnings Guidance: Targets mid-single-digit EPS growth despite volume/cost headwinds, with $3.3 billion in capital investments for infrastructure, locomotive modernization, and capacity projects.

Segment Performance

The Bulk segment saw a 3% revenue increase on a 3% volume increase in the fourth quarter. The Industrial segment reported a 1% revenue increase on a 1% volume increase, with average revenue per car remaining flat. Intermodal volumes were challenged by lower West Coast imports, but the company still delivered a record-breaking quarter in domestic intermodal. According to Kenny Rocker, Executive Vice President, the company is "excited about the intermodal business, citing investments in hubs and services."

Outlook for 2026

The company expects a softer environment in 2026, particularly in Industrial production, but remains optimistic about coal's potential driven by favorable natural gas prices. Union Pacific expects continued strength in Grain Products and is focusing on business development and leveraging its strong service products to close gaps in Industrial. The company's capital outlook for 2026 is $3.3 billion, with a focus on strengthening its infrastructure and generating strong returns.

Valuation

With a P/E Ratio of 19.53 and an EV/EBITDA of 13.48, Union Pacific's valuation appears reasonable compared to its historical averages. The company's ROE of 41.95% and ROIC of 11.7% indicate strong profitability. Analysts estimate revenue growth of 5.0% for the next year, which is slightly higher than the industry average.

Merger Update

The company is working through the regulatory process for its merger with Norfolk Southern and expects to refile its application after responding to the STB's request for clarification. Union Pacific is confident that the combined railroad will enhance competition and benefit customers with faster, more reliable service. Jim Vena, CEO, stated that the merger is "compelling and changes the dynamic and competition."

3. NewsRoom

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Jones Financial Companies Lllp Has $47.16 Million Position in Union Pacific Corporation $UNP

10:09

Source: defenseworld.net

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Marco Investment Management LLC Has $14.29 Million Stock Holdings in Union Pacific Corporation $UNP

08:14

Source: defenseworld.net

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Principal Financial Group Inc. Trims Stake in Union Pacific Corporation $UNP

Feb -02

Source: defenseworld.net

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Nicholson Wealth Management Group LLC Has $359,000 Holdings in Union Pacific Corporation $UNP

Feb -02

Source: defenseworld.net

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Union Pacific Corporation (NYSE:UNP) Given Average Rating of “Moderate Buy” by Brokerages

Feb -02

Source: defenseworld.net

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4,385 Shares in Union Pacific Corporation $UNP Bought by Berman McAleer LLC

Jan -31

Source: defenseworld.net

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L.M. Kohn & Company Decreases Stock Holdings in Union Pacific Corporation $UNP

Jan -31

Source: defenseworld.net

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Alpha Cubed Investments LLC Sells 2,171 Shares of Union Pacific Corporation $UNP

Jan -30

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.00%)

6. Segments

Railroad

Expected Growth: 4.0%

The railroad segment growth of Union Pacific Corporation is driven by increasing demand for efficient and environmentally friendly transportation, expansion of e-commerce, and investments in infrastructure and technology. A 4.0% growth rate suggests a strong performance, likely due to pricing power, volume growth, and operational efficiency gains.

7. Detailed Products

Agricultural Products

Union Pacific Corporation provides transportation services for agricultural products such as grains, soybeans, and corn.

Automotive Products

Union Pacific offers transportation services for automotive products such as finished vehicles, auto parts, and raw materials.

Chemicals

Union Pacific provides transportation services for chemicals such as hazardous materials, fertilizers, and plastics.

Coal

Union Pacific offers transportation services for coal, a key fuel source for electricity generation.

Construction Materials

Union Pacific provides transportation services for construction materials such as lumber, cement, and aggregates.

Energy Products

Union Pacific offers transportation services for energy products such as crude oil, refined petroleum products, and wind turbine components.

Food and Beverages

Union Pacific provides transportation services for food and beverages such as grains, sugar, and beer.

Forest Products

Union Pacific offers transportation services for forest products such as lumber, paper, and wood pulp.

Intermodal

Union Pacific provides intermodal transportation services for containers and trailers.

Metals and Minerals

Union Pacific offers transportation services for metals and minerals such as iron ore, copper, and steel.

8. Union Pacific Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Union Pacific Corporation has a moderate threat of substitutes due to the availability of alternative modes of transportation such as trucks and airplanes. However, the company's extensive rail network and efficient operations mitigate this threat to some extent.

Bargaining Power Of Customers

Union Pacific Corporation has a low bargaining power of customers due to its dominant position in the rail transportation industry. The company's large customer base and diversified revenue streams also reduce the bargaining power of individual customers.

Bargaining Power Of Suppliers

Union Pacific Corporation has a moderate bargaining power of suppliers due to its dependence on suppliers for fuel, equipment, and other essential materials. However, the company's large scale of operations and long-term contracts with suppliers mitigate this threat to some extent.

Threat Of New Entrants

Union Pacific Corporation has a low threat of new entrants due to the high barriers to entry in the rail transportation industry. The company's extensive rail network, large capital investments, and regulatory hurdles make it difficult for new entrants to compete effectively.

Intensity Of Rivalry

Union Pacific Corporation operates in a highly competitive industry with several major players. The company faces intense rivalry from other railroads, which can lead to pricing pressures and reduced market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 69.80%
Debt Cost 5.06%
Equity Weight 30.20%
Equity Cost 9.22%
WACC 6.32%
Leverage 231.13%

11. Quality Control: Union Pacific Corporation passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Norfolk Southern

A-Score: 5.6/10

Value: 2.7

Growth: 4.7

Quality: 5.8

Yield: 4.0

Momentum: 7.0

Volatility: 9.7

1-Year Total Return ->

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Stock-Card
CN Rail

A-Score: 5.6/10

Value: 3.3

Growth: 5.1

Quality: 6.5

Yield: 5.0

Momentum: 4.0

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
Union Pacific

A-Score: 5.5/10

Value: 2.8

Growth: 4.9

Quality: 6.5

Yield: 4.0

Momentum: 5.0

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
CSX

A-Score: 5.3/10

Value: 2.8

Growth: 5.8

Quality: 6.0

Yield: 3.0

Momentum: 5.0

Volatility: 9.3

1-Year Total Return ->

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Stock-Card
Canadian Pacific Railway

A-Score: 5.2/10

Value: 3.0

Growth: 5.4

Quality: 6.4

Yield: 2.0

Momentum: 5.0

Volatility: 9.7

1-Year Total Return ->

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Stock-Card
Wabtec

A-Score: 5.1/10

Value: 2.9

Growth: 6.6

Quality: 6.6

Yield: 0.0

Momentum: 6.0

Volatility: 8.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

241.49$

Current Price

241.49$

Potential

-0.00%

Expected Cash-Flows