It's been a great evening session for Union Pacific investors, who saw their shares rise 2.6% to a price of $242.86 per share. At these higher prices, is the company still fairly valued? If you are thinking about investing, make sure to check the company's fundamentals before making a decision.
Union Pacific's Valuation Is in Line With Its Sector Averages:
Union Pacific Corporation, through its subsidiary, Union Pacific Railroad Company, operates in the railroad business in the United States. The company belongs to the Industrials sector, which has an average price to earnings (P/E) ratio of 22.19 and an average price to book (P/B) ratio of 4.06. In contrast, Union Pacific has a trailing 12 month P/E ratio of 23.3 and a P/B ratio of 10.57.
Union Pacific's PEG ratio is 4.35, which shows that the stock is probably overvalued in terms of its estimated growth. For reference, a PEG ratio near or below 1 is a potential signal that a company is undervalued.
EPS Trend Sustained Primarily by Reducing the Number of Shares Outstanding:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (MM) | $22,832 | $21,708 | $19,533 | $21,804 | $24,875 | $24,140 |
| Revenue Growth | n/a | -4.92% | -10.02% | 11.63% | 14.08% | -2.95% |
| Operating Margins | 37% | 39% | 40% | 43% | 40% | 38% |
| Net Margins | 26% | 27% | 27% | 30% | 28% | 26% |
| Net Income (MM) | $5,966 | $5,919 | $5,349 | $6,523 | $6,998 | $6,365 |
| Net Interest Expense (MM) | $870 | $1,050 | $1,141 | $1,157 | $1,271 | $1,342 |
| Depreciation & Amort. (MM) | $2,191 | $2,216 | $2,210 | $2,208 | $2,246 | $2,298 |
| Earnings Per Share | $7.91 | $8.38 | $7.88 | $9.95 | $11.21 | $10.41 |
| EPS Growth | n/a | 5.94% | -5.97% | 26.27% | 12.66% | -7.14% |
| Diluted Shares (MM) | 754 | 706 | 679 | 655 | 624 | 573 |
