UNP
Union Pacific Corporation
$288.36
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 32.5% above fair value
You pay
$288.36
Bear
$174.11
Fair
$217.64
Bull
$261.17
Bear
$174.11
-39.6%
$12.07 × 12x P/E
Fair
$217.64
-24.5%
$12.07 × 15x P/E
Bull
$261.17
-9.4%
$12.07 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
23.9x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $303.10 from 47 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $217.64 per share.
Warnings
Dividend-based valuation: $117.08 (below our primary estimate by 35%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $303.10 (from 47 analysts). Our estimate is 40% 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