Union Pacific Corporation (UNP) Stock Valuation — PE Analysis
Railroads · NYSE
Current Price
$308.05
PE Ratio (TTM)
24.9x
Intrinsic Value
$381.2
+19.2% margin of safety
COMPETITIVE MOAT
↑Extensive Rail Network
Union Pacific operates a vast, integrated rail network across the western U.S. This infrastructure is incredibly difficult and expensive for competitors to replicate.
↑High Switching Costs
Customers face significant costs and logistical challenges to switch from rail to other transportation modes. This locks in existing business for UNP.
↑Economies of Scale
The sheer volume of freight moved allows UNP to achieve lower per-unit costs than smaller operators. This pricing advantage is hard to overcome.
INVESTMENT RISKS
↓Economic Downturn Impact
A significant economic slowdown would reduce freight volumes, directly impacting Union Pacific's revenue and profitability. This is a cyclical industry.
↓Competition from Trucking
While rail has advantages, trucking offers greater flexibility for certain routes and cargo. Increased trucking efficiency or capacity could draw business away.
↓Infrastructure Investment Needs
Maintaining and upgrading its extensive network requires continuous, substantial capital investment. Unexpected maintenance needs or delays can strain resources.
Base case
UNP base case PE valuation
At a current price of $308.05, the base case PE valuation puts UNP fair value near $381.2 per share. That figure assumes 10.7% yearly earnings growth, a target PE multiple of 24.94x, and a 10% discount rate.
Intrinsic Value
$381.2
Margin of safety
+19.2%
Expected annual return
+4.4%
Base case assumptions: 10.7% annual earnings growth, 24.94x target PE, 10% discount rate, 5 year projection. Data as of 2026-08-21.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the UNP PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for Union Pacific Corporation respond.
Open PE Calculator for UNPCompany Overview
Union Pacific Corporation, a prominent American railway enterprise, conducts its primary operations through its subsidiary, Union Pacific Railroad Company. The company provides extensive freight transportation services for a wide array of commodities. Its diverse cargo includes agricultural products like grain, fertilizers, and refrigerated foods; energy resources such as coal, renewables, petroleum, and liquid petroleum gases; and industrial materials encompassing construction products, chemicals, plastics, forest products, metals, ores, soda ash, and sand. Union Pacific also facilitates the movement of finished automobiles, automotive parts, and general merchandise in intermodal containers, serving a varied clientele that spans agricultural processors, energy producers, and industrial manufacturers. As of December 31, 2021, the company's vast rail network stretched 32,452 route miles, strategically connecting major ports along the Pacific and Gulf Coasts with crucial gateways throughout the Midwestern and Eastern United States. Established in 1862, Union Pacific Corporation is headquartered in Omaha, Nebraska.
Financial Metrics — UNP PE Stock Valuation Data
PE Ratio (TTM)
24.9x
PEG Ratio
3.46
Earnings Yield
4.01%
ROE (TTM)
38.6%
Revenue/Share (TTM)
$42.82
Dividend Yield
1.79%
Debt/Equity
1.51x
Frequently Asked Questions
What is the PE ratio of UNP?
The trailing twelve-month PE ratio of UNP reflects how much investors pay per dollar of Union Pacific Corporation's earnings. This metric is most useful when compared to Railroads peers and the company's own historical range.
Is UNP overvalued based on PE ratio?
UNP's PE of 24.9x combined with a PEG ratio of 3.46 provides a growth-adjusted perspective. A PEG above 2.0 means the P/E is high relative to the earnings growth rate. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Railroads, a DCF analysis may be more appropriate.
How do I value UNP stock using PE ratio?
To value Union Pacific Corporation using PE: (1) Compare the current PE (24.9x) against the Railroads median to assess relative pricing, (2) check the PEG ratio (3.46) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of UNP?
UNP's PEG ratio is 3.46, calculated by dividing the PE ratio (24.9x) by the expected earnings growth rate. A PEG above 2.0 means the P/E is high relative to the expected earnings growth rate. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for UNP stock valuation?
PE ratio gives a quick relative read — how UNP is priced versus Railroads peers. DCF provides an absolute value based on projected free cash flows. For UNP, with a strong ROE of 38.6%, both methods are worth using — PE for a market-relative check, DCF to stress-test whether fundamentals justify the price. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See UNP DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Industrials valuationsP/E and DCF value UNP with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-08-21. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.