Union Pacific: Is It Bottoming Soon?

Union Pacific Corp

Union Pacific Corp (UNP) is the largest publicly traded railroad company in North America. The company commands an impressive 32,000 miles of rail network in western US.

Railroads are considered a wide moat industry, as it entails immense capital requirements and new entrants in the industry are almost unheard of. Railroads are the pulse of the economy. Whether transporting crude, lumber, merchandise, agricultural or industrial products, railroads are what keeps the economy moving. Railroads are often closely observed by economists and analysts to get a sense of how the overall economy is doing. It is also considered a leading indicator for any recessions or slowdowns.

While crude shipments are on their way to a recovery thanks to the rise in oil prices, coal remains in a secular downtrend – both of which play a crucial part in UNP’s revenue.

Is the stock bottoming soon? Continue Reading Here >

2 thoughts on “Union Pacific: Is It Bottoming Soon?

  1. Coal seems to be really hurting the RR’s and I think the downward demand in coal is going to continue as natural gas replaces it more and more across the country. Coal is a fairly large chunk of UNP’s freight revenue as well. The stock has recovered quite a bit since January so we’ve already seen a near term bottom. The real question remains is where the long term bottom is if there even is one.

    • Hi Captain,
      Coal does play a big part in UNP’s revenue, but looks like that number is shrinking. It used to be 18% in 2014 and is down to 16% in 2015. The bottom isnt here yet,…so if you are looking to buy, I’d wait for a better opportunity.

      Best
      R2R

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