UNP US S&P 500Russell 1000 Earnings call · transcribed from the recording
Union Pacific Corporation (UNP) · Q3 2026 results and valuation
Share price: $302.11 · 2026-11-11
Union Pacific Corporation operates a railroad network in the western two-thirds of the United States, connecting major ports and gateways in the U.S., Mexico, and Canada. The company transports bulk materials, industrial products, and premium goods, including grain, chemicals, and automobiles, for domestic and international markets. Source: 10-K annual report (2026-02-06)
Results Q3 2026 vs Q2 2026 · previous quarter · published 22 Oct 2026 and 23 Jul 2026
Net income up 4.2% on the previous quarter. Management sounded upbeat, in its script and in answers to analysts.
1 · Numbers
+4.2%
Net income vs Q2 2026
Outlook given
Net income 2.08B vs 1.99B
Revenue +4.9%
Why Against the same quarter last year (+16.1%), net income rose primarily because freight revenue grew 6% to a record $5.6 billion (excluding fuel surcharge) and premium revenue increased 21% on a 9% increase in volume.
2 · How management spoke
Upbeat
More upbeat than 68% of company calls
Answers to analysts: typical, in line with the script.
Last call it was different: the answers were less upbeat than the script.
3 · What stood out
Union Pacific updated its 2026 capital spend to $3.5 billion to invest for growth and pull ahead work originally planned for 2027.
Valuation
Is Union Pacific Corporation undervalued?
Reverse DCF. Free cash flow from the last full fiscal year (2025-12-31), grown for 10 years, discounted back, plus a terminal value. “Implied growth” is the rate the current price assumes.
At −0.5% growth a year (3-year revenue growth), the model's fair value is $51.17 a share — the stock trades 490% above it. Today's price assumes 16.5% growth a year.
Current price
$302.11
close of 2026-11-11
Market implies growth of iThe yearly free-cash-flow growth, for the next 10 years, that today’s share price already assumes. If you believe the company grows faster than this, the stock is cheap under this model; slower, and it is expensive.
+16.5% for 10 yrs
Fair value / share
$51.17
Buy below
$38.37
Price vs fair value
Overvalued >200%
Price vs buy-below price
Overvalued >200%
Management expects
Earnings +9% · from the Q3 2026 report: “Year-to-date in 2026, the company delivered reported earnings per share growth of 9%, meeting its outlook of reported high single-digit growth.”
A guidance figure for earnings, usually one year ahead, not a 10-year free-cash-flow rate.
Read between the lines
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Figure
Union Pacific reported a record net income of $2.1 billion and adjusted earnings per share of $3.53, which grew 15% from the previous period.
Source quote
“Union Pacific reported record financial results as net income total $2.1 billion, and our adjusted earnings per share grew 15% to $3.53.”
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Figure
Higher year-over-year fuel prices and the related fuel surcharge added 900 basis points to freight revenue.
Source quote
“In addition, higher year-over-year fuel prices and the related fuel surcharge added 900 basis points to freight revenue.”
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Figure
Excluding fuel surcharge, freight revenue grew 6% to a record $5.6 billion, reflecting a change in revenue volume for the quarter.
Source quote
“Excluding fuel surcharge, freight revenue grew 6% to a record $5.6 billion.”
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Figure
Intermodal volume grew 11% as the Intermodal Service Performance Index finished at 92%.
Source quote
“Intermodal Service Performance Index finished at 92% as intermodal volume grew 11%.”
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Guidance
Year-to-date in 2026, the company delivered reported earnings per share growth of 9%, meeting its outlook of reported high single-digit growth.
3 more
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Figure
Offsetting some of that cost pressure was a 1% decrease in headcount against that 6% volume growth, enabling us to generate Union Pacific's ninth consecutive quarter of record workforce productivity.
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Figure
Over 500 customers have written letters of support to show their commitment to the company.
Source quote
“On the customer side, we have over 500 customers that have written letters of support.”
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Figure
The company projects fuel prices for the fourth quarter to be around $4.85 a gallon.
Source quote
“So you heard me say that we're looking at pricing right now in terms of fuel prices for the fourth quarter to be around $4.85 a gallon.”
Tone
How upbeat the language was, compared with other companiesiTone counts positive minus negative finance words, adjusted for length. Executives mostly speak positively, so the labels compare each call with every company's latest call: “typical” is the middle third, “very upbeat” the top tenth, “cautious” the bottom tenth.. Dot: Q3 2026. Ring: Q2 2026.
Script and answers carried a similar tone, so the script's message held up under questioning.
Sentences that drove the tone
“International automotive volumes improved 8% versus last year, driven by strong West Coast import volumes and business wins.”
“The active locomotive fleet increased 2% to handle 4% higher gross ton miles, demonstrating strong asset efficiency.”
“The team operated at a consistently high level, safely supporting 6% volume growth while providing strong service for our customers.”
Full figures
USD · SEC EDGAR XBRL (10-Q, period end 2026-09-30)
| Metric | Q3 2026period end 2026-09-30 | Q2 2026period end 2026-06-30 | Change | Q3 2025 | YoY |
|---|---|---|---|---|---|
| Revenue | 7.20B | 6.86B | +4.9% | 6.24B | +15.3% |
| Operating income | 2.94B | 2.76B | +6.5% | 2.55B | +15.5% |
| Net income | 2.08B | 1.99B | +4.2% | 1.79B | +16.1% |
| EPS | 3.49 | 3.36 | +3.9% | 3.01 | +15.9% |
| P/E today 22.6 | 21.2 | 22.0 | −0.8 | 20.1 | +1.1 |
Topics
Most discussed now
- Moving to industrial, revenue was up 14% on 6% higher volume.
- The team operated at a consistently high level, safely supporting 6% volume growth while providing strong service for Union Pacific's…
- Union Pacific responded quickly to capitalize on the improving freight market by unstacking containers and utilizing its buffer of…
- Union Pacific is getting, to your point, great volume leverage, and that's what gives it confidence that it is going to be...
- Certainly that has an impact on Union Pacific's results, weighs on its margins, but the team is doing a great job...
Faded since Q2 2026
- Fading I also want to call out that second quarter business mix was a slight headwind in the quarter as growth...
- Fading When you exclude fuel surcharge, strong core pricing gains delivered record freight revenue and average revenue per car.
- Fading Premium revenue for the quarter increased 21% on a 4% increase in volume and a 16% increase in average revenue...
- Fading Opportunities remain to improve, and Union Pacific is committed to providing consistent reliable service while growing with its customers.
Latest announcements
Official filings, newest first. Summaries are generated from each filing and its attachment; every figure is checked against the source.
- Results of operations · SEC 8-K
Union Pacific reported third-quarter 2026 net income of $2.1 billion and diluted EPS of $3.49, both up 16% compared to the third quarter of 2025.
- Director or officer change; Regulation FD disclosure · SEC 8-K
Union Pacific announced that Executive Vice President and Chief Financial Officer Jennifer Hamann will retire in early 2027 after 35 years of service.
- Results of operations · SEC 8-K
Union Pacific reported net income of $2.0 billion and diluted EPS of $3.36 for the second quarter of 2026, up 6% and 7% respectively compared to the same period in 2025.
- Shareholder vote results · SEC 8-K · routine
- Results of operations · SEC 8-K
Union Pacific reported first-quarter 2026 net income of $1.7 billion and diluted earnings per share of $2.87, compared to $1.6 billion and $2.70 per share in the first quarter of 2025.
- Results of operations · SEC 8-K
Union Pacific reported full-year 2025 net income of $7.1 billion, representing a 6% increase from $6.7 billion in 2024, with diluted earnings per share of $11.98, up 8% from $11.09.
- Regulation FD disclosure · SEC 8-K
Union Pacific and Norfolk Southern filed an application with the Surface Transportation Board on December 19, 2025, seeking approval for the proposed combination of the two companies.
- Director or officer change; Regulation FD disclosure · SEC 8-K
Union Pacific Corporation elected W. Anthony Will to serve as a director and member of the Audit and Finance Committees, effective January 5, 2026.
Catalyst calendar
management-stated targets — from the latest earnings call; plans, not promises.
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the second half of 2027
closing the Norfolk Southern merger
Source quote
“We will continue growing our cash reserves in anticipation of closing the Norfolk Southern merger in the second half of 2027.”
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the remainder of 2026
affirming our outlook of reported EPS growth in the high single-digit range versus 2025's reported EPS of $11.98
Source quote
“Looking out to the remainder of 2026 on slide 8, we are affirming our outlook of reported EPS growth in the high single-digit range versus 2025's reported EPS of $11.98.”
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2026
improving our core operating ratio
Source quote
“We are also affirming our ability to continue improving our core operating ratio in 2026 and leading the industry.”
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the fourth quarter
expecting prices to average around $4.85 per gallon
Source quote
“Our 2026 reported operating ratio remains challenged by higher fuel prices as we are currently expecting prices to average around $4.85 per gallon in the fourth quarter.”
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2026
updating our capital spend to $3.5 billion
Source quote
“We're also updating our capital spend to $3.5 billion for 2026 as we invest for growth and pull ahead some of the capital work planned for 2027.”