The Fundamental Case for and Against Union Pacific Corporation (UNP)

It is interesting to note that Union Pacific Corporation (NYSE:UNP) is active and made a solid movement in the last trading day. Now trading with a market value of 107.19B, the company has a mix of catalysts and obstacles that spring from the nature of its operations. In light of the many issues surrounding this company, we thought it was a good time to take a close look at the numbers in order to form a realistic perspective on the fundamental picture for this stock.

Union Pacific Corporation (NYSE:UNP) Fundamentals That Matter

It’s generally a good idea to start with the most fundamental piece of the picture: the balance sheet. The balance sheet health of any company plays a key role in its ability to meet its obligations and maintain the faith of its investment base. For UNP, the company currently has 1.28 billion of cash on the books, which is offset by 800 million in current liabilities. The trend over time is important to note. In this case, the company’s debt has been falling. The company also has 58.33 billion in total assets, balanced by 33.47 billion in total liabilities, which should give you a sense of the viability of the company under any number of imagined business contexts.

Union Pacific Corporation (UNP) saw 973 million in free cash flow last quarter, representing a quarterly net change in cash of -572 million. Perhaps most importantly where cash movements are concerned, the company saw about 1.83 billion in net operating cash flow.

Union Pacific Corporation (NYSE:UNP) Revenue Growth Potential

As far as key trends that demonstrate something of the future investment potential of this stock, we need to take a closer look at the top line, first and foremost. Last quarter, the company saw 5.45 billion in total revenues. That represents a quarterly year/year change in revenues of 0.05 in sequential terms, the UNP saw sales decline by 0.01.

But what about the bottom line? After all, that’s what really matters in the end. Union Pacific Corporation (UNP) is intriguing when broken down to its core data. The cost of selling goods last quarter was 2.96 billion, yielding a gross basic income of 2.49 billion. For shareholders, given the total diluted outstanding shares of 787 million, this means overall earnings per share of 9.25. Note, this compares with a consensus analyst forecast of 1.67 in earnings per share for its next fiscal quarterly report.

Is Union Pacific Corporation (NYSE:UNP) Valuation Attractive

Looking ahead at valuations, according to the consensus, the next fiscal year is forecast to bring about 8.34 in total earnings per share. If we consider a median price to earnings ratio on the stock, that corresponds with a stock price of 15.50. However, one should always remember: the trends are more important than the forecasts. This continues to be an interesting story, and we look forward to updating it again soon on Union Pacific Corporation.

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