Union Pacific (NYSE: UNP) reported earnings per share (EPS, profit divided by shares outstanding) of $3.53 for the third quarter ended Sept. 30, 2026, on Oct. 22, 2026. That beat the analyst estimate of $3.47 by $0.06, or 1.7%. Our data feed does not yet show third-quarter revenue or a year-ago EPS comparison, so this article uses the latest complete financials, for the second quarter, to explain the trend behind the result.
Key facts
- Oct. 22, 2026: Union Pacific reported third-quarter EPS of $3.53 against an analyst estimate of $3.47, a difference of +$0.06 (1.7%). Third-quarter revenue and its estimate were not available in our data at publication.
- Second quarter ended June 30, 2026: revenue was $6.86B, up 11.5% from the second quarter of 2025. Net income was $1.99B, up 6.2%.
- Oct. 21, 2026: the stock closed at $287.87, up 0.09% on the day. Its 52-week range is $215.53 to $315.99. Market cap is $171.02B.
- Trailing 12 months: price-to-earnings (P/E, share price divided by yearly profit per share) is 23.27, and the dividend yield is 1.9%.
- Stock Expert AI MoonshotScore V2: 78.5, rated Strong.
What happened
The headline is a modest beat. EPS of $3.53 came in above the $3.47 estimate. A beat of 1.7% is small, and it suggests results landed close to what Wall Street expected.
We cannot yet give the full revenue picture for the third quarter. For the year-ago comparison, the third quarter of 2025 (ended Sept. 30, 2025) had revenue of $6.24B and net income of $1.79B. Our data does not include a year-ago EPS figure for that quarter, so we will not state one. We also have no management call transcript for this report, so we do not quote executives or attribute drivers to them.
The second quarter, the most recent period with complete data, shows where the business was heading. Revenue was $6.86B and net income was $1.99B, both higher than a year earlier. Revenue by segment for the second quarter ended June 30, 2026, shows where the growth came from:
- Premium: $2.09B, versus $1.73B in the second quarter of 2025. This was the largest increase of any segment.
- Industrial: $2.39B, versus $2.21B a year earlier.
- Bulk: $2.04B, versus $1.90B a year earlier.
- Accessorial (extra service charges): $129.0M, versus $107.0M a year earlier.
- Other subsidiary revenues: $194.0M, versus $181.0M a year earlier.
Five-quarter trend
Operating margin is the share of revenue left after running costs. Free cash flow is cash from operations minus capital spending.
| Quarter | Revenue | Operating margin | Net income | Free cash flow | |---|---|---|---|---| | Q2 FY2025 (ended June 30, 2025) | $6.15B | 40.9% | $1.88B | $1.40B | | Q3 FY2025 (ended Sept. 30, 2025) | $6.24B | 40.8% | $1.79B | $1.57B | | Q4 FY2025 (ended Dec. 31, 2025) | $6.08B | 39.2% | $1.85B | $1.23B | | Q1 FY2026 (ended March 31, 2026) | $6.22B | 39.4% | $1.70B | $1.50B | | Q2 FY2026 (ended June 30, 2026) | $6.86B | 40.3% | $1.99B | $2.20B |
What changed: margins dipped in the fourth quarter of 2025 and the first quarter of 2026, then recovered in the second quarter of 2026 as revenue rose. Operating margin was still a little below the 40.9% of the year-ago second quarter. Free cash flow in the second quarter of 2026 was the highest of the five quarters, helped by operating cash flow of $3.08B against capital spending of $873.0M.
The company paid dividends of $819.0M in the second quarter of 2026. Buybacks were small at $26.0M, compared with $959.0M in the second quarter of 2025 and none in the three quarters between.
Why it matters for investors
Valuation versus peers. Union Pacific trades at a trailing P/E of 23.27. Peers on the same measure:
| Company | Market cap | P/E (trailing 12 months) | Net margin | |---|---|---|---| | Union Pacific (UNP) | $171.02B | 23.27 | 28.8% | | Canadian National (CNI) | $73.86B | 22.02 | 26.9% | | Canadian Pacific Kansas City (CP) | $77.45B | 26.25 | 25.0% | | CSX (CSX) | $89.66B | 25.08 | 24.0% | | Norfolk Southern (NSC) | $73.69B | 27.99 | 21.0% |
Union Pacific has the highest net margin in this group and a P/E in the middle of it, below CP, CSX and Norfolk Southern and above Canadian National.
Analyst view. FMP's analyst data shows 47 ratings: 1 strong buy, 28 buy, 17 hold, 1 sell and no strong sells, for a consensus of "Buy." The consensus price target averages $330.80, with a median of $334.00, a high of $350.00 and a low of $294.00. All of these are above the Oct. 21 price of $287.87. Recent actions were reiterations: Citigroup (Buy) on Oct. 7, JP Morgan (Neutral) on Oct. 5 and Susquehanna (Positive) on Oct. 2. These are analysts' views, not ours. For a longer horizon, analysts estimate EPS of $4.58 for the period ending March 30, 2029.
Stock Expert AI MoonshotScore. The score is 78.5 (Strong). Its pillars are measured against other companies in the sector:
- Quality: 91 (strongest)
- Momentum: 79
- Growth: 67
- Safety: 56
- Valuation: 35 (weakest)
What could go wrong.
- Valuation. The valuation pillar is the weakest at 35. Price-to-free-cash-flow is 26.29 and EV/EBITDA (company value relative to operating earnings) is 15.07. FMP's discounted cash flow model, which estimates value from projected cash flows, gives $152.77 per share, well below the market price. This is one model's estimate, not a forecast, and such models are sensitive to their assumptions.
- Debt. Total debt was $31.17B as of June 30, 2026, against $2.11B of cash and short-term investments. Debt-to-equity is 1.51. This is manageable for a railroad with steady cash flow, but it is a fixed cost if freight demand weakens.
- Thin beat. A 1.7% EPS beat leaves little room for a miss if costs or volumes move the wrong way.
- Insiders. In the last 90 days, the filings we reviewed show no open-market insider purchases or sales.
What to watch next
- Third-quarter revenue and margin. Once the full figures are available, check whether operating margin held near the 40.3% of the second quarter and whether revenue stayed higher than a year earlier.
- Premium and industrial volumes. These two segments drove most of the second-quarter revenue and are the best read on freight demand.
- Free cash flow and buybacks. Free cash flow reached $2.20B in the second quarter. Whether buybacks pick up from $26.0M shows how management is using that cash.
- Debt. Total debt of $31.17B is the figure to track against cash flow.
- Analyst targets. Whether the $294.00 to $350.00 target range moves after the results.
Frequently asked questions
Q: Did Union Pacific beat earnings estimates in the third quarter of 2026?
Yes on EPS. Union Pacific reported $3.53 per share for the quarter ended Sept. 30, 2026, against an analyst estimate of $3.47, a difference of $0.06 or 1.7%. Our data did not include third-quarter revenue or a revenue estimate at publication.
Q: How did Union Pacific's revenue and profit compare with a year earlier?
For the second quarter ended June 30, 2026, revenue was $6.86B, up 11.5% from the second quarter of 2025, and net income was $1.99B, up 6.2%. For the third quarter of 2025, the year-ago quarter for the newly reported period, revenue was $6.24B and net income was $1.79B.
Q: Is Union Pacific stock expensive compared with other railroads?
On trailing P/E it is in the middle of the group: 23.27, versus 22.02 for Canadian National, 25.08 for CSX, 26.25 for Canadian Pacific Kansas City and 27.99 for Norfolk Southern. Union Pacific also has the highest net margin of the five, at 28.8%. Our MoonshotScore valuation pillar is 35, the weakest of its five pillars. This is information, not investment advice.
This is educational content, not investment advice. Past performance does not guarantee future results.