Investment Thesis
Union Pacific demonstrates exceptional fundamental strength with industry-leading profitability metrics (40.2% operating margin, 29.1% net margin) and outstanding returns on equity (38.7% ROE). The company generates substantial free cash flow ($5.5B) while maintaining solid interest coverage (10.3x), supporting its capital-intensive business model and debt servicing capabilities.
UNP Strengths
- Exceptional operating margin of 40.2% indicates efficient cost management and pricing power in railroad operations
- Outstanding ROE of 38.7% demonstrates superior capital efficiency and ability to generate shareholder returns
- Strong free cash flow generation of $5.5B (22.4% FCF margin) provides flexibility for debt reduction and shareholder distributions
- Healthy interest coverage ratio of 10.3x indicates robust ability to service significant debt obligations
- Consistent earnings growth with net income up 5.8% YoY and diluted EPS up 8.0% YoY
- Significant insider activity with 37 Form 4 filings in last 90 days suggests management confidence
UNP Risks
- Elevated leverage with debt-to-equity ratio of 1.72x and long-term debt of $31.8B relative to equity of $18.5B
- Below-1.0x current and quick ratios (0.91x) indicate potential near-term liquidity constraints typical but notable for capital-intensive industries
- Modest revenue growth of only 1.1% YoY suggests limited organic volume expansion despite strong profitability
- Capital expenditure requirements of $3.8B annually limit financial flexibility in cyclical downturns
Key Metrics to Watch
- Operating margin sustainability as freight volumes and pricing dynamics evolve
- Free cash flow trends and debt reduction pace relative to $31.8B long-term debt
- Revenue growth acceleration and shipper demand indicators in freight transportation
- Return on equity maintenance as capital deployment strategies evolve
UNP Financial Metrics
UNP Profitability Ratios
UNP Balance Sheet & Liquidity
UNP 5-Year Financial Trend
5-Year Trend Summary: UNION PACIFIC CORP's revenue has grown significantly by 12% over the 5-year period, indicating strong business expansion. The most recent EPS of $10.45 reflects profitable operations.
UNP Growth Metrics (YoY)
UNP Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2025 | $6.1B | $1.7B | $2.75 |
| Q2 2025 | $6.0B | $1.7B | $2.74 |
| Q1 2025 | $6.0B | $1.6B | $2.69 |
| Q3 2024 | $5.9B | $1.5B | $2.51 |
| Q2 2024 | $6.0B | $1.6B | $2.57 |
| Q1 2024 | $6.0B | $1.6B | $2.67 |
| Q3 2023 | $5.9B | $1.5B | $2.51 |
| Q2 2023 | $6.0B | $1.6B | $2.57 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
UNP Capital Allocation
UNP SEC Filings
Access official SEC EDGAR filings for UNION PACIFIC CORP (CIK: 0000100885)