Railroads · NYSE
Current Price
$264.78
Intrinsic Value
Use the calculator below to estimate
Run a full DCF analysis on Union Pacific Corporation with auto-filled fundamentals, adjustable assumptions, and sensitivity heatmap.
Union Pacific Corporation, through its subsidiary, Union Pacific Railroad Company, operates in the railroad business in the United States. The company offers transportation services for grain and grain products, fertilizers, food and refrigerated products, and coal and renewables to grain processors, animal feeders, ethanol producers, and other agricultural users; petroleum, and liquid petroleum gases; and construction products, industrial chemicals, plastics, forest products, specialized products, metals and ores, soda ash, and sand, as well as finished automobiles, automotive parts, and merchandise in intermodal containers. As of December 31, 2021, its rail network included 32,452 route miles connecting Pacific Coast and Gulf Coast ports with the Midwest and Eastern United States gateways. The company was founded in 1862 and is headquartered in Omaha, Nebraska.
ROIC (TTM)
11.6%
ROE (TTM)
40.4%
FCF Yield
3.62%
Based on trailing twelve-month data, UNP shows a free cash flow per share of N/A and a ROIC of 11.6%, key inputs for stock valuation using the DCF method. The P/FCF ratio of N/A and FCF yield of 3.62% are important context metrics when evaluating UNP's stock valuation relative to peers.
The intrinsic value of UNP depends on assumptions about future growth rate, discount rate (WACC), and terminal value. A DCF model discounts projected free cash flows back to present value — small changes in WACC can shift the estimate by 20% or more, which is why sensitivity analysis is essential.
Whether UNP is undervalued depends on comparing the DCF-derived intrinsic value to the current market price of $264.78. A positive margin of safety (intrinsic value above market price) suggests potential undervaluation, but the degree of confidence depends on the reliability of your growth and discount rate assumptions.
To perform a DCF valuation on Union Pacific Corporation: (1) Start with the trailing free cash flow per share as the base, (2) project future FCF growth over 5-10 years based on Railroads industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting UNP's risk profile, and (4) add a terminal value for cash flows beyond the projection period.
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Union Pacific Corporation, this means projecting how much free cash flow the Railroads will produce over the next 5-10 years, then discounting those amounts to today's dollars. UNP's ROIC of 11.6% shows moderate capital returns.
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For UNP, the capital structure and equity risk premium determine WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%.
