UNP
Union Pacific Corporation$266.69
Sell
Target $235.84
Report: Mar 07, 2026Industrials • Railroads • Asset-Based OperatorSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$266.69-11.6%
Rec: SellConviction: High
Entry Target
N/A
N/A
Fair Value
$235.84
(12% below current)
Stop Loss
N/A
N/A
Position Size
None
Time Horizon
N/A
Key Metrics
Live Snapshot
Market Data
52 Week High$268.14
52 Week Low$204.66
Avg. 3 Month Volume3.39M
Efficiency
LTM Gross Margin75.8%
LTM EBITDA Margin52.8%
LTM EBIT Margin42.7%
LTM Operating Margin40.2%
LTM ROA10.4%
LTM ROE41.9%
LTM ROIC11.0%
LTM ROCE16.6%
Capital Structure
Market Cap (MM)$144.0B
Enterprise Value (MM)$175.3B
Shares Outstanding595.00M
Total Debt (MM)$32.55B
Cash & Equivalents (MM)$1.27B
LTM Net Debt (MM)$31.29B
LTM Net Debt/EBITDA2.4x
Growth
TTM Rev. Growth1.1%
Last 3-Yr Rev. CAGR-0.5%
Last 3-Yr EBITDA CAGR0.9%
Last 3-Yr EPS CAGR2.2%
Valuation
Street Target Price$276.57
LTM EV/Revenue7.2x
LTM EV/Gross Profit9.4x
LTM EV/EBIT16.7x
LTM EV/EBITDA13.5x
LTM P/E20.2x
LTM EV/FCF31.9x
LTM P/FCF26.2x
LTM P/TB2.1x
LTM P/B7.8x
Dividend Yield2.2%
Payout Ratio45.3%
Executive SummarySituation: Current price is $266.69 versus fair value $235.84 (-11.6% expected return), and valuation confidence is stable. Debate: Bull case depends on Surface Transportation Board (STB) Merger Ruling The STB's decision on the $85,000M Norfolk Southern merger is the definitive event for the thesis. Bear case centers on Regulatory Block of Norfolk Southern Merger The STB may block the merger on the grounds that it creates a transcontinental monopoly, leading to a collapse of the synergy-driven valuation narrative. Conclusion: Recommendation is Sell with no position, pending a materially better risk/reward setup.
Bull Case
Creation of a transcontinental network through the Norfolk Southern merger could unlock $2,750M in annual synergies and 15-20% merchandise speed gains. Continued productivity improvements, such as the 3% headcount reduction in 2025, could drive the operating ratio toward the mid-50s.
Bear Case
The STB may block the $85,000M merger on anti-competitive grounds, leaving UNP with high integration costs and no synergies. Revenue growth has stagnated at 1.1%, and the 176.3% Debt/Equity ratio leaves the company vulnerable to a macro downturn or rising interest costs.
Key Catalysts
Mid-Term (6-18 months)Impact: Critical
Surface Transportation Board (STB) Merger Ruling The STB's decision on the $85,000M Norfolk Southern merger is the definitive event for the...
Near-Term (0-6 months)Impact: Moderate
Debt Repayment Execution Management has committed to paying off $1,500M in debt in H1 2026. Successful execution would signal a commitment t...
Long-Term (18+ months)Impact: Moderate
Union Pacific is at a critical juncture as it navigates the largest merger in rail history while its core volume growth has slowed to 1.1%....
Primary Risks
Concern: High
Regulatory Block of Norfolk Southern Merger The STB may block the merger on the grounds that it creates a transcontinental monopoly, leading...
Concern: High
Macroeconomic Volume Softness A recession or continued industrial production stagnation could lead to a 5% volume decline, which, given UNP'...
Concern: Medium
Governance is structurally strong but lacks 'skin in the game.' While 91% of the board is independent and roles are separated, the 0.12% ins...
Recent Activity
2025-05-10SEC Filing (8-K)
+6.73%Union Pacific holds 2025 Annual Meeting of Shareholders with all director nominees elected
2025-01-23SEC Filing (8-K)
+5.20%Union Pacific reports fourth quarter and full year 2024 results with record earnings
2023-07-26SEC Filing (8-K)
+10.42%Union Pacific reports second quarter 2023 results with earnings of $2.57 per diluted share
2022-10-20SEC Filing (8-K)
-6.80%Union Pacific reports third quarter 2022 results with adjusted earnings of $3.19 per diluted share
Valuation Table
9.8/10Decision Grade
Scenario Range
$188
Bear
$231
Base
$261
Bull
$267