Union Pacific (UNP) Stock Forecast & Price Target

Union Pacific, the largest public railroad in North America, reported impressive revenue generation of $24 billion in 2024, driven by a diverse freight portfolio and strategic international ties, including a significant stake in Mexican railroad Ferromex. The company anticipates a 5% revenue growth in 2025 due to core pricing gains, combined with a projected 2.7% increase in total volumes from the previous year, demonstrating resilience in various freight categories, particularly grain and industrial chemicals. Operational efficiencies are further underscored by a 6% improvement in workforce productivity and a commitment to leveraging technology, which positions Union Pacific favorably in managing costs amid inflationary pressures.

Union Pacific reported a decline in premium revenue per unit (RPU) of approximately 9% year-over-year, primarily attributable to higher international volumes that counterbalanced domestic growth. The company's bulk segment experienced a 4.2% drop in volume, with coal carloads notably declining nearly 20% year-over-year, suggesting ongoing challenges in that sector despite some gains in grain and fertilizer. Additionally, the forecast indicates that growth in key areas such as intermodal and coal may be further constrained in the upcoming year, leaving limited potential for improvement in the operating ratio.