Union Pacific (UNP) Stock Forecast & Price Target

Union Pacific is projected to achieve annual free cash flow (FCF) growth to approximately $12 billion by Year 3, supporting robust investments in its extensive rail network and sustaining dividend commitments. The company's strategic positioning includes ownership of a significant share in Ferromex, enabling it to capitalize on cross-border freight opportunities that represent about 10% of its revenue. Furthermore, the expansion of Union Pacific’s network enhances its competitiveness against Canadian ports and railroads while improving access to global trade hubs.

Union Pacific faces significant risks that contribute to a negative outlook on its stock, including potential declines in growth from key freight origins and adverse weather conditions affecting crop quality and network operations. The company may also be adversely impacted by unfavorable currency fluctuations, which could hinder cross-border freight flows, and economic volatility that may dampen industrial production and consumer demand. Furthermore, ongoing challenges in the coal market, including declining global prices and the displacement of coal within the U.S., raise further concerns regarding revenue stability.