Union Pacific Corp (UNP, Financial) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at $242.71, Union Pacific Corp has witnessed a daily gain of 4.63%, marked against a three-month change of 0.97%. A thorough analysis, underlined by the GF Score, suggests that Union Pacific Corp is well-positioned for substantial growth in the near future.
What Is the GF Score?
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 5/10
- Profitability rank: 9/10
- Growth rank: 9/10
- GF Value rank: 6/10
- Momentum rank: 10/10
Each one of these components is ranked and the ranks also have positive correlation with the long-term performances of stocks. The GF score is calculated using the five key aspects of analysis. Through backtesting, we know that each of these key aspects has a different impact on the stock price performance. Thus, they are weighted differently when calculating the total score. With a high profitability and growth rank, and an exceptional momentum rank, GuruFocus assigned Union Pacific Corp the GF Score of 92 out of 100, which signals the highest outperformance potential.
Understanding Union Pacific Corp Business
Union Pacific Corp, with a market cap of $148.08 billion and sales of $24.12 billion, is a titan in the transportation industry. Based in Omaha, Nebraska, it is the largest public railroad in North America. Operating on more than 30,000 miles of track in the western two-thirds of the US, Union Pacific Corp generated $24 billion of revenue in 2023 by hauling coal, industrial products, intermodal containers, agriculture goods, chemicals, fertilizers, and automotive goods. The company also owns about one-fourth of Mexican railroad Ferromex and historically derives roughly 10% of its revenue hauling freight to and from Mexico, showcasing its strategic geographic positioning and diversified revenue streams.
Profitability Rank Breakdown
The Profitability Rank of Union Pacific Corp reflects its superior ability to generate earnings compared to its industry peers. A profitability rank of 9 out of 10 indicates that Union Pacific Corp is among the top performers in terms of profitability, which is a testament to its efficient operations and strong pricing power within the transportation sector.
Union Pacific Corp's strong Predictability Rank of 4.0 stars out of five underscores its consistent operational performance, providing investors with increased confidence in the company's ability to maintain its earnings trajectory and financial health.
Growth Rank Breakdown
Union Pacific Corp's high Growth Rank demonstrates the company's commitment to expanding its business and enhancing shareholder value. The company's 3-Year Revenue Growth Rate of 11.2% outperforms 59.46% of 920 companies in the Transportation industry, indicating a strong competitive position and the ability to capitalize on market opportunities.
Moreover, Union Pacific Corp has seen a robust increase in its earnings before interest, taxes, depreciation, and amortization (EBITDA) over the past few years. Specifically, the three-year EBITDA growth rate stands at 8.6%, and the rate over the past five years is 7.4%. This trend accentuates the company's continued capability to drive growth and operational efficiency.
Next Steps
Considering Union Pacific Corp's financial strength, profitability, and growth metrics, the GF Score highlights the firm's unparalleled position for potential outperformance. The company's strategic initiatives, operational efficiency, and strong market presence combine to form a compelling investment case for those seeking long-term value creation.
GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
