Union Pacific (UNP) Stock Forecast & Price Target

Union Pacific's projected annual free cash flow (FCF) is expected to grow to approximately $12 billion by Year 3, which will provide robust financial support for ongoing investments, sustain dividend commitments, and maintain a balanced capital allocation strategy. Additionally, the expansion of Union Pacific's network enhances competitiveness with Canadian ports and railroads, while also presenting opportunities to access broader international markets and improve connections to global trade hubs. These factors collectively contribute to a strong financial outlook for the company, underpinned by its significant revenue generation capabilities across various freight sectors.

Union Pacific faces several significant risks that contribute to a negative outlook on its stock. Key concerns include adverse economic conditions affecting industrial production and consumer demand, potential severe weather impacting crop quality and transportation fluidity, and unfavourable currency fluctuations that could hinder cross-border freight flows with Mexico. Additionally, further declines in global export coal prices and ongoing displacement of coal in U.S. markets pose further threats to Union Pacific's revenue and growth potential.