| Valuation method | Value, € | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | n/a | n/a |
| Intrinsic value (DCF) | n/a | |
| Graham-Dodd Method | 3.50 | -98 |
| Graham Formula | 83.70 | -57 |
Union Pacific Corporation (UNP.DE) is a leading railroad operator in the United States, providing essential transportation services through its subsidiary, Union Pacific Railroad Company. With a vast rail network spanning 32,452 route miles, the company connects key economic hubs, including Pacific and Gulf Coast ports with Midwest and Eastern U.S. gateways. Union Pacific specializes in transporting a diverse range of goods, including agricultural products, coal, petroleum, chemicals, automotive parts, and intermodal containers. Founded in 1862 and headquartered in Omaha, Nebraska, the company plays a critical role in the U.S. supply chain, serving industries such as agriculture, energy, and manufacturing. As a key player in the Industrials sector, Union Pacific leverages its extensive infrastructure and operational efficiency to maintain a competitive edge in the railroad industry. Its strategic network and diversified cargo mix position it as a vital component of North American freight logistics.
Union Pacific Corporation presents a compelling investment opportunity due to its dominant position in the U.S. railroad industry, extensive network, and diversified revenue streams. The company's strong financial performance, with a net income of €6.75 billion and diluted EPS of €11.09, underscores its profitability. However, investors should consider risks such as high total debt (€32.46 billion) and exposure to cyclical industries like coal and agriculture. The company's beta of 1.068 indicates moderate market sensitivity, making it a stable but not defensive play. Union Pacific's consistent dividend (€5.16 per share) and robust operating cash flow (€9.35 billion) enhance its appeal to income-focused investors. Long-term growth prospects hinge on efficiency improvements, infrastructure investments, and demand for sustainable freight solutions.
Union Pacific's competitive advantage lies in its extensive rail network, operational scale, and strategic positioning in key U.S. freight corridors. The company benefits from high barriers to entry in the railroad industry, where infrastructure costs and regulatory hurdles limit competition. Union Pacific's diversified cargo mix reduces reliance on any single sector, mitigating cyclical risks. However, the company faces competition from other Class I railroads, particularly in overlapping regions. Its ability to maintain cost efficiency through precision scheduled railroading (PSR) initiatives is critical in competing with peers. Union Pacific's focus on technological advancements, such as autonomous inspection systems and fuel-efficient locomotives, enhances its operational edge. The company's strong relationships with industrial and agricultural customers further solidify its market position. Challenges include regulatory scrutiny, labor disputes, and the need for continuous capital expenditures to maintain and expand infrastructure.