Don't Take a Position in Union Pacific Stocks Without Knowing Its Fundamentals!

Union Pacific logged a 0.4% change during today's afternoon session, and is now trading at a price of $200.17 per share.

Union Pacific shares moved -19.3% over the last 52 weeks, with a high of $250.52 and a low of $183.69. During this time, the stock lagged the S&P 500 index by -12.0%. As of January 2022, the company's 50-day average price is $199.13. Union Pacific Corporation, through its subsidiary, Union Pacific Railroad Company, operates in the railroad business in the United States. The large-cap Industrials company has 30,717 full time employees and is based in Omaha, NE. Union Pacific has returned a 2.5% dividend yield over the last 12 months.

Snapshot of the Company's Strong operating Margins:

2019-12-31 2020-12-31 2021-12-31 2022-12-31
Revenue (MM) $21,708 $19,533 $21,804 $24,875
Revenue Growth n/a -10.02% 11.63% 14.08%
Gross Margins 44.3% 47.0% 48.2% 45.0%
Gross Margins Growth n/a 6.09% 2.55% -6.64%
Operating Margins 39.4% 40.1% 42.8% 39.9%
Operating Margins Growth n/a 1.78% 6.73% -6.78%
Net Margins 27.27% 27.38% 29.92% 28.13%
Net Margins Growth n/a 0.4% 9.28% -5.98%
Earnings Per Share $8.38 $7.88 $9.95 $11.2
EPS Growth n/a -5.97% 26.27% 12.56%
Diluted Shares (MM) 706 679 655 610
Free Cash Flow (MM) $5,156 $5,613 $6,096 $5,742
FCF Growth n/a 8.86% 8.61% -5.81%
Capital Expenditures (MM) -$3,453 -$2,927 -$2,936 -$3,620
Net Debt / EBITDA 2.21 2.41 2.43 2.57

Union Pacific Is Too Expensive at Current Levels:

Compared to the Industrials sector's average of 20.49, Union Pacific has a trailing twelve month P/E ratio of 17.9 and, according to its EPS guidance of 12.53, an expected P/E ratio of 16.0. Union Pacific's PEG ratio is 2.12 based on its 8.4% compound average growth rate of historical and projected earnings per share. This suggests that the company's shares are overvalued.

Union Pacific's P/B ratio is 10.1 compared to its sector average of 3.78. The company is likely overvalued in terms of its net asset value. The company's shares are currently trading 209.7% above their fair value as expressed by Benjamin Graham's formula:

√(22.5 * 4-year average EPS * book value per share) = √(22.5 * 9.35 * 19.861) = $64.64

Union Pacific Is the Subject of Mixed Market Indicators:

27 analysts are following Union Pacific and have set target prices ranging from $176.0 to $245.0 per share. On average, they have given the company a rating of buy. At the current price of $200.17, UNP is trading -9.15% away from its average analyst target price of $220.33 per share, implying an analyst consensus of some upside potential for the stock.

The company has a very low short interest since 1.0% of the company's shares are tied to short positions. Institutions own 81.1% of Union Pacific's shares, while the insider ownership rate stands at 0.24%. The biggest shareholder is the Vanguard Group, Inc. with a 9% stake in the company worth approximately $10,862,470,559.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.