UNION PACIFIC CORP (UNP) Stock Analysis
UNION PACIFIC CORP (UNP) Stock Analysis
Analysis from 10-Q filed 2025-10-23. Data as of Q4 2025.
Overall Grade: F (Concerning)
UNION PACIFIC CORP faces challenges in financial performance that warrant careful analysis.
| Metric | Value | Context |
|---|---|---|
| ROIC | 16.7% | Solid returns |
| FCF Margin | 22.4% | Strong cash generation |
| Debt/Equity | 1.6x | Elevated debt |
Investment Thesis: Strong return on invested capital of 16.7% suggests durable competitive advantages and efficient capital allocation.
Explore UNION PACIFIC CORP: Earnings History | Filing Intelligence | ROIC Analysis
Profitability: UNION PACIFIC CORP earns 16.7% ROIC, Top 25% in Transportation
UNION PACIFIC CORP's trailing-twelve-month ROIC of 16.7% ranks Top 25% in Transportation companies (sector median: 6.7%), driven by NOPAT margin of 31.3% combined with asset turnover of 0.4x. Source: 10-Q filed 2025-10-23. Gross margin of 100.0% with operating margin at 40.2% reflects strong pricing power.
| Metric | UNP | Rating | Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 16.7% | Good | Above sector median of 6.7% |
| Return on Equity (ROE) | 42.4% | Excellent | Efficient use of shareholder equity |
| Gross Margin | 100.0% | Excellent | Strong pricing power |
| Operating Margin | 40.2% | Excellent | Efficient operations |
Cash Flow: UNION PACIFIC CORP generates $5.5B FCF at 22.4% margin, positive NaN/8 quarters
UNION PACIFIC CORP generated $5.5B in free cash flow (TTM), a 22.4% FCF margin, a margin that ranks Top 5% in Transportation. Operating cash flow exceeds net income by 1.3x, indicating high earnings quality. FCF was positive in N/A of the last 8 quarters. Source: 10-Q filed 2025-10-23.
| Metric | UNP | Rating | Context |
|---|---|---|---|
| Free Cash Flow Margin | 22.4% | Excellent | Excellent cash conversion |
| Free Cash Flow (TTM) | $5.5B | Good | Positive cash generation |
| OCF/Net Income | 1.3x | Excellent | High earnings quality |
| FCF Consistency (8Q) | N/A | Warning | Variable cash flow |
Balance Sheet: UNION PACIFIC CORP at 1.6x leverage
UNION PACIFIC CORP's debt-to-equity ratio of 1.6x reflects high leverage. Total debt of $30.3B offset by $1.3B in cash. Source: 10-Q filed 2025-10-23.
| Metric | UNP | Rating | Context |
|---|---|---|---|
| Debt to Equity | 1.6x | Warning | Elevated leverage |
| Net Cash Position | $-29.0B | Warning | Net debt position |
Valuation: UNION PACIFIC CORP trades at 19.3x earnings
UNION PACIFIC CORP trades at a P/E of 19.3x. Free cash flow yield of 4.0% reflects market expectations for growth.
| Metric | UNP | Rating | Context |
|---|---|---|---|
| P/E Ratio | 19.3x | Adequate | Reasonable valuation |
| EV/Sales | 6.9x | Adequate | Growth premium priced in |
| FCF Yield | 4.0% | Adequate | Lower cash yield |
| Dividend Yield | 2.4% | Adequate | Growth focus over income |
Capital Allocation: UNION PACIFIC CORP returns 4.3% shareholder yield
UNION PACIFIC CORP's total shareholder yield is 4.3% (dividends 2.4% + buybacks 1.9%). Source: 10-Q filed 2025-10-23.
| Metric | UNP | Rating | Context |
|---|---|---|---|
| Total Shareholder Yield | 4.3% | Good | Dividend + buyback yield combined |
| Buyback Yield | 1.9% | Adequate | Minimal buyback activity |
| Total Capital Returned (TTM) | $5.9B | Good | Dividends + buybacks returned to shareholders |
Sector Rankings
| Metric | Value | Percentile | vs Median |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 16.7% | Top 25% | 2.5x above |
| Free Cash Flow Margin | 22.4% | Top 5% | 5.9x above |
| Gross Margin | 100.0% | Top 5% | 4.3x above |
| Operating Margin | 40.2% | Top 5% | 6.2x above |
| Return on Equity (ROE) | 42.4% | Top 5% | 4.1x above |
| P/E Ratio | 19.3x | N/A | - |
Financial Scorecard
| Metric | UNP | Rating | Sector Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 16.7% | Good | Top 25% of sector (median: 6.7%) |
| Free Cash Flow Margin | 22.4% | Excellent | Top 5% of sector (median: 3.8%) |
| Gross Margin | 100.0% | Excellent | Top 5% of sector (median: 23.3%) |
| Debt to Equity Ratio | 164.0% | Warning | High financial leverage |
| P/E Ratio (Price-to-Earnings) | 19.3x | Adequate | Fair value |
| Free Cash Flow Yield | 4.0% | Adequate | Moderate yield |
Frequently Asked Questions
Q: What is UNION PACIFIC CORP's Return on Invested Capital (ROIC)?
UNION PACIFIC CORP (UNP) has a trailing twelve-month Return on Invested Capital (ROIC) of 16.7%. This compares above the sector median of 6.7%. An ROIC between 12-20% indicates solid capital allocation and sustainable competitive position.
Q: What is UNION PACIFIC CORP's Free Cash Flow Margin?
UNION PACIFIC CORP (UNP) has a free cash flow margin of 22.4%, generating $5.5 billion in free cash flow over the trailing twelve months. A FCF margin above 20% indicates excellent cash conversion and a high-quality business model.
Q: Is UNION PACIFIC CORP stock overvalued or undervalued?
UNION PACIFIC CORP (UNP) trades at a P/E ratio of 19.3x, which is above the sector median of N/A. The EV/Sales multiple is 6.9x. Free cash flow yield is 4.0%, which is in line with market averages.
Q: Does UNION PACIFIC CORP pay a dividend?
UNION PACIFIC CORP (UNP) currently pays a dividend yield of 2.4%. Including share buybacks, the total shareholder yield is 4.3%. This yield is moderate, suggesting a balance between income and growth reinvestment.
Q: How much debt does UNION PACIFIC CORP have?
UNION PACIFIC CORP (UNP) has a debt-to-equity ratio of 1.6x with total debt of $30.3 billion. Net debt position is $29.0 billion.
Q: What is UNION PACIFIC CORP's revenue and earnings growth?
UNION PACIFIC CORP (UNP) grew revenue by 1.1% year-over-year. Earnings per share increased by 7.9% compared to the prior year. Modest growth indicates a mature business with stable demand.
Q: Is UNION PACIFIC CORP buying back stock?
UNION PACIFIC CORP (UNP) repurchased $2.7 billion of stock over the trailing twelve months. This represents a buyback yield of 1.9%.
Q: How does UNION PACIFIC CORP compare to competitors in Transportation?
Compared to other companies in Transportation, UNION PACIFIC CORP (UNP) shows: ROIC of 16.7% is above the sector median of 6.7% (Top 12%). FCF margin of 22.4% exceeds the sector median of 3.8% (Top 0% of sector). Gross margin at 100.0% is 76.7 percentage points higher than sector peers. These rankings are based on MetricDuck's analysis of all Transportation companies with available SEC filings.
Q: What warning signs should I watch for with UNION PACIFIC CORP?
Investors in UNION PACIFIC CORP (UNP) should monitor these potential warning signs: 1) Debt-to-equity of 1.6x is elevated. Regular monitoring of SEC filings and quarterly trends is recommended.
Data Source: Data sourced from 10-Q filed 2025-10-23. TTM metrics as of Q4 2025.
Methodology: Financial metrics calculated from SEC 10-K and 10-Q filings using standardized formulas. Sector comparisons use peer group based on SIC code.
Scope: This analysis covers SEC filing fundamentals — profitability, cash flow, balance sheet, and valuation metrics. For analyst estimates and price targets, consult sell-side research.
This analysis is for informational purposes only and does not constitute investment advice.