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Union Pacific Corporation (UNP)
Intrinsic Value (DCF)
Current$230.51
→
Intrinsic$138.03
-40%
$75.82$138.03$261.87
Market implies 18% growth for 5 years
Current price reflects execution expectations above 8% growth — not unreasonable for quality businesses.
At $231, the market prices in continued high-teens cash flow growth (18%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $76 → Bull $262. Current price implies expectations above the base case, closer to bull expectations.
| Discount ↓Growth → | 4% | 6% | 8% | 10% |
|---|---|---|---|---|
| 8% | $180 | $201 | $224 | $249 |
| 10% | $109 | $123 | $138 | $154 |
| 12% | $71 | $81 | $92 | $105 |
| 14% | $47 | $55 | $64 | $74 |
Bull Case
- Bull case ($262) offers 14% upside at 10% growth, 8% discount
- Conservative 8% growth assumption is achievable based on track record
Bear Case
- Bear case ($76) implies 67% downside at 6% growth, 12% discount
- Price reflects 18% growth expectations vs 8% historical — high bar to clear
- Trading 40% above base case — execution must exceed assumptions to justify
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5-Year Free Cash Flow Projection
Year 1$6.37B
Year 2$6.87B
Year 3$7.42B
Year 4$8.02B
Year 5$8.66B
Terminal$137.23B
📐 Model Inputs
Growth Rate8.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate9.5%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$5.89BTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.