Union Pacific Corporation (NYSE: UNP) heads into December 2025 trading in the middle of its 52‑week range, with investors trying to balance a powerful earnings and efficiency story against unusually high regulatory and merger risk.
At the close on December 1, 2025, Union Pacific stock changed hands at $231.36, giving the railroad giant a market value of about $137 billion. The shares sit between a 52‑week low of $204.66 and a high of $256.84, trade on roughly 19.6x trailing earnings and carry a 2.4% dividend yield based on an annualized payout of $5.52 per share.
StockAnalysis
Year‑to‑date, UNP has delivered a low‑single‑digit positive return (around 3–4%), but it has still modestly lagged the broader U.S. equity market over the last 12 months, even as fundamentals improved.
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Below is a detailed look at the latest news, forecasts and analysis as of December 1, 2025 – including the $85 billion Norfolk Southern merger, Q3 results, dividend moves and what Wall Street expects for 2026.
Where Union Pacific Stock Stands Now
Key snapshot as of the close on December 1, 2025:
StockAnalysis
Share price: $231.36
After‑hours price: about $231.85
Market cap: $137.2 billion
TTM revenue: $24.55 billion
TTM net income: $7.05 billion
TTM EPS: $11.78
P/E (ttm): 19.6x
Forward P/E: 18.7x
Dividend: $5.52 per share annually (2.39% yield)
Ex‑dividend date: December 5, 2025
52‑week range: $204.66 – $256.84
Beta: ~1.0
In other words, UNP is not cheap on an absolute basis, but it trades at a valuation that assumes steady growth, improving margins and a successful Norfolk Southern merger, rather than a distressed scenario.
Q3 2025 Earnings: A Clean Beat Built on Productivity and Pricing
Union Pacific’s third‑quarter 2025 results were the main fundamental catalyst behind the recent move higher in the stock.
According to the company’s earnings release and independent summaries:
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Union Pacific Investor Relations
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GAAP diluted EPS: $3.01
Adjusted EPS: $3.08, up 12% year‑on‑year
Operating revenue: $6.244 billion, up about 3% YoY
Net income: $1.8 billion, up ~9% YoY
Reported operating ratio (OR): 59.2% vs. 60.3% a year ago
Adjusted OR: 58.5%, an improvement of 180 bps
Management highlighted several operational records:
Freight car velocity rose to about 226 miles per day, up 8% YoY
Terminal dwell and locomotive dwell hit record lows, indicating faster network fluidity
Train length, workforce productivity and fuel efficiency all improved meaningfully
On the revenue mix side, domestic intermodal volumes were strong and set records, while international intermodal traffic fell about 17% YoY, acting as a drag. Coal and grain shipments remained a bright spot, helping drive higher freight revenue ex‑fuel.
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Guidance and Near‑Term Setup
Management reaffirmed its multi‑year framework of high‑single to low‑double‑digit EPS growth, kept capex around $3.4 billion for 2025 and raised the dividend (more on that below), but paused share repurchases to preserve balance sheet flexibility ahead of the Norfolk Southern deal.
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One note of caution:
In Q4, carload volumes are currently running about 6% lower year‑on‑year, reflecting tough comparisons in intermodal and softer conditions in autos and certain industrial markets.
Merger‑related costs continue to weigh on margins, albeit at a slower pace than in Q3.
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Still, the quarter sent a clear message to Wall Street: UNP’s service metrics and pricing power are in good shape, and the company can expand margins even with mixed volumes.
The $85 Billion Norfolk Southern Merger: Huge Upside, Real Regulatory Risk
The single biggest swing factor for Union Pacific stock is the proposed $85 billion acquisition of Norfolk Southern (NSC) to create the first U.S. coast‑to‑coast freight railroad.
What’s Been Agreed So Far
The deal was announced in July 2025 as a cash‑and‑stock transaction valuing Norfolk Southern at roughly $85 billion.
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On November 14, 2025, more than 99% of shareholders at both Union Pacific and Norfolk Southern voted in favor of the transaction.
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If approved, the combined company would:
Control a network stretching from the Pacific to the Atlantic
Reshape U.S. freight flows for grain, autos, coal, chemicals and intermodal containers
Become the largest freight railroad in North America by enterprise value, handling roughly 40% of U.S. rail traffic, according to some industry estimates.
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President Donald Trump has publicly signaled support for the merger, framing it as a way to upgrade U.S. infrastructure and improve freight efficiency.
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Unions: From Opposition to Endorsement
Initially, some rail unions opposed the deal on job‑security grounds. That stance has shifted notably:
In September 2025, SMART‑TD, the largest U.S. rail union, reversed its opposition and said it would support the merger after securing a deal that provides career‑long job protection for affected members.
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On November 24, 2025, the International Brotherhood of Boilermakers (IBB) became the fourth national union to sign an agreement guaranteeing lifetime job security for employees who work at both Union Pacific and Norfolk Southern at the time of closing, subject to normal employment conditions.
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Similar job‑protection deals have been reached with the National Conference of Firemen and Oilers (NCFO) and the Brotherhood of Railway Carmen, among others.
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From an equity perspective, this union support significantly reduces the risk of a labor‑driven derailment of the deal, but it may also limit how aggressively the combined company can cut headcount to extract cost synergies.
Regulators and Rivals Push Back
The biggest uncertainty is regulatory approval from the Surface Transportation Board (STB), which oversees rail mergers.
Recent developments:
On November 14, 2025, nine Republican state attorneys general (including Tennessee, Kansas, Ohio, Florida, North Dakota, South Dakota, Mississippi, Montana and Iowa) sent a letter to the STB warning that the merger could stifle competition, raise shipping costs, reduce service reliability and even pose national security risks by harming U.S. manufacturers and agricultural exporters.
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On December 1, 2025, rival BNSF Railway filed a 106‑page petition asking the STB to first investigate whether Union Pacific has honored competition‑enhancing conditions from its 1996 merger with Southern Pacific – before the agency even decides on the new UP–NS deal.
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BNSF accuses UP of a “pattern of obstructive conduct” that has allegedly limited BNSF’s ability to compete, particularly at 2‑to‑1 shipper locations and on certain shared corridors.
If the STB agrees to a separate investigation, it could delay a merger decision beyond the early‑2027 closing date that Union Pacific and Norfolk Southern are targeting. STB rules allow up to 455 days after an application is accepted to issue a final decision, compared to the 345‑day timeline the railroads are hoping for.
Railway Age
In short: union risk is falling, but regulatory and competitive risk is rising. For UNP shareholders, the merger’s huge potential upside now comes with a clearer set of political and legal tripwires.
Dividend and Capital Allocation: Income Appeal with a Pause on Buybacks
Despite merger noise, Union Pacific continues to lean into its dividend identity:
On November 18, 2025, the board declared a fourth‑quarter dividend of $1.38 per share, payable on December 30, 2025, to shareholders of record on December 5.
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That represents a 3% increase from the prior quarterly rate of $1.34 and brings the annualized payout to $5.52, or about a 2.4% yield at current prices.
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According to multiple sources, Union Pacific has raised or maintained its dividend for more than a century, making it one of the most reliable income names in the industrials sector.
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However, management has paused share repurchases to preserve balance sheet flexibility as it lines up financing for the Norfolk Southern deal. The company has indicated that buybacks are likely to resume in year two after the merger closes, which, depending on the STB timeline, points to around 2028.
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For now, investors are being paid primarily via dividends, not buybacks, while UNP navigates the regulatory process.
Wall Street’s Union Pacific Stock Forecast: Double‑Digit Upside
Analyst sentiment toward UNP remains broadly constructive, even after the 2025 rebound.
Consensus Ratings and Price Targets
From several major aggregators as of December 1, 2025:
StockAnalysis: 24 analysts rate UNP a “Buy”, with an average 12‑month price target of $259.74, implying about 12.3% upside from the latest close.
StockAnalysis
MarketBeat: Compiles ratings showing an average “Moderate Buy” consensus and a mean target around $261.63. The breakdown includes 1 Strong Buy, 16 Buys and 11 Holds, with no Sell ratings.
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Public.com: Reports that 22 analysts currently rate the stock “Buy”, with a 2025 price prediction of about $259.50.
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AlphaSpread: Cites an average one‑year Wall Street target of $266.83, with a low forecast near $218.6 and a high around $308.7 – implying roughly 14% average upside and limited downside to the low end.
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Major investment banks have also updated their views:
Royal Bank of Canada (RBC) lifted its target to $276 and rates UNP “Outperform”.
Goldman Sachs has a $263 target and a “Neutral” stance.
Citigroup recently upgraded Union Pacific to “Buy” with a target in the mid‑$260s, citing improving fundamentals and merger optionality.
UBS maintains a “Neutral” view with a target near $253.
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In aggregate, Wall Street is not treating Union Pacific as a deep value play – but it does see low‑teens percentage upside over the next 12 months on top of the 2.4% dividend yield, assuming the macro landscape cooperates and merger progress stays on track.
Earnings and Revenue Projections
Consensus forecasts around the time of the Q3 print and subsequent revisions point to:
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Q4 2025 EPS: roughly $3.04 on revenue of around $6.3 billion
Full‑year 2025 EPS: in the $11.8–12.0 range
Full‑year 2025 revenue: about $24.7–24.9 billion
Looking further out, analysts generally expect mid‑single‑digit revenue growth and EPS growth ahead of revenue, driven by:
Continued OR improvement from productivity and service quality
Mix shift toward higher‑yield segments
Potential merger synergies (if the Norfolk Southern deal is approved)
Valuation Check: Is UNP Cheap, Expensive, or Fairly Priced?
Valuation opinions on Union Pacific vary, but several recent analyses land in a similar range.
Fundamental Models
A late‑November review from Simply Wall St, which applies a discounted cash flow‑style fair‑value model, concludes that:
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UNP’s fair value sits around $260 per share, implying about 11% undervaluation at current prices.
The company trades on a P/E of roughly 19.4x, compared with a peer group average near 17.5x and a broader railroad industry multiple around 26.7x.
Short‑term momentum has improved – with a mid‑single‑digit gain over the last month – yet the one‑year total shareholder return remains slightly negative, underscoring that the longer‑term recovery is still incomplete.
Community fair‑value estimates on the same platform cluster between about $239 and $260 per share, suggesting that even bullish retail investors see limited upside beyond the high‑$200s without a strong merger payoff.
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Market‑Based Signals
From a market‑data perspective:
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UNP trades modestly above both its 50‑day and 200‑day moving averages, which currently sit in the mid‑$220s, signaling a firm but not overheated uptrend.
Technical services like StockInvest have recently pegged a “fair” opening price for December 1 near $231.6, very close to where the stock actually traded, implying no extreme short‑term mispricing.
With a beta close to 1.0, UNP tends to move roughly in line with the broader market – not a hyper‑volatile play – though merger headlines can trigger outsized daily swings.
Put simply: UNP looks reasonably valued to slightly undervalued relative to analyst fair‑value estimates and its own history, but it is not a bargain‑basement stock. The market is already pricing in decent execution; further upside likely requires either a benign STB outcome or upside surprises on margins and volumes.
Key Drivers That Could Push Union Pacific Stock Higher
Based on current information, several themes could support further gains in UNP:
Merger Synergies and Network Reach
A successful Norfolk Southern integration could generate significant cost savings and revenue synergies, as shippers gain single‑line service across an integrated east‑west network, reducing handoffs and dwell times at major hubs like Chicago.
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A larger footprint may also strengthen Union Pacific’s pricing power in key lanes, supporting margin expansion.
Sustained Operational Excellence
Q3 showed that Union Pacific can push OR below 59% while hitting record productivity metrics. If those gains persist, the company has a credible path to industry‑leading efficiency.
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Coal, Grain and Domestic Intermodal Strength
Elevated coal demand and strong grain shipments have offset weakness in international intermodal, and domestic intermodal volumes remain robust. These segments could continue to support solid freight revenue growth, especially if U.S. industrial activity improves.
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Dividend Growth and Eventual Buyback Resumption
The recent 3% dividend increase reinforces UNP’s commitment to returning cash to shareholders, even during a major M&A process.
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Once the balance sheet is right‑sized post‑merger, potential share repurchases in the late‑2020s could provide an additional tailwind to EPS.
Institutional Support
Hedge funds and asset managers have been adding to positions; for example, Stevens Capital Partners and Grantham Mayo Van Otterloo both increased their stakes in recent quarters. MarketBeat data suggests institutional and hedge‑fund ownership stands above 80% of shares outstanding, indicating strong professional sponsorship.
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Main Risks for UNP Investors to Watch
The bullish case is not without important caveats:
Regulatory and Antitrust Risk
The STB has broad discretion in setting conditions or even blocking the Norfolk Southern merger. BNSF’s petition to revisit old UP‑SP commitments and the multi‑state AG letter highlight meaningful political resistance.
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The merger could be delayed beyond 2027 or approved with onerous remedies (trackage rights, divestitures, service guarantees) that dilute the synergy math.
Volume and Macro Sensitivity
Union Pacific is leveraged to industrial production, consumer demand and energy markets. A sharp slowdown in manufacturing or housing – or continued weakness in international trade – could pressure carloads and mix, limiting earnings growth.
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Execution and Integration Complexity
Rail mergers have historically carried material execution risk, including potential service disruptions, customer dissatisfaction and cost overruns. While management has emphasized careful planning, integrating two Class I railroads is never trivial.
Labor and Cost Inflation
Lifetime job‑protection agreements and multi‑year union contracts reduce the risk of strikes but may slow workforce rationalization and lock in higher labor costs in an inflationary environment.
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Valuation and Expectations Risk
With UNP already trading near 19–20x trailing earnings and the Street’s average target only 12–14% above current levels, any disappointment on earnings, service metrics or merger progress could trigger a pullback.
Bottom Line: How the Market Looks at Union Pacific Stock Today
As of December 1, 2025, the consensus view on Union Pacific stock can be summarized as:
Fundamentals: Strong – Q3 showed double‑digit EPS growth, better efficiency and resilient pricing despite mixed volumes.
Shareholder returns: Solid – a 2.4% dividend yield with a long history of increases, but buybacks on hold until the merger path is clearer.
Valuation: Reasonable – shares trade in the middle of their 52‑week range and appear modestly undervalued relative to most fair‑value and price‑target models, but not dramatically so.
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Key catalyst: The Norfolk Southern deal – potentially transformative if approved on favorable terms, but also the source of the largest regulatory and execution risks.
For now, Wall Street largely characterizes UNP as a quality railroad franchise with an above‑average income profile and a merger‑driven call option. Whether that option pays off will depend heavily on the STB, the response of competitors like BNSF and CSX, and management’s ability to sustain its current operational momentum.
Nothing here is investment advice, but if you’re following Union Pacific stock, the next major signposts to watch are:
The timing and content of the formal merger application to the STB
Any STB response to BNSF’s December 1 petition
Updated volume and OR commentary in Q4 2025 earnings and early‑2026 guidance
Those developments are likely to set the tone for UNP’s performance into 2026.
