UNP
Union Pacific Corporation
$296.65
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 65.2% above fair value
You pay
$296.65
Bear
$143.64
Fair
$179.55
Bull
$215.46
Bear
$143.64
-51.6%
$11.97 × 12x P/E
Fair
$179.55
-39.5%
$11.97 × 15x P/E
Bull
$215.46
-27.4%
$11.97 × 18x P/E
Adjust Assumptions
15.0x
11.97$
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
24.8x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (47 analysts)
$330.50
Divergence from AlphaVal
46%
Summary
Applying a 15x P/E to adjusted EPS of $11.97, the base-case value is $179.55 per share. DDM cross-check: $99.97.
Warnings
Dividend-based valuation: $99.97 (below our primary estimate by 44%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $330.50 (from 47 analysts). Our estimate is 46% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples