UNP
Union Pacific Corporation
Hybrid Industrial
★ Quality 55/100Price today
$289.62
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See what it is worthcharlieapp.co
A monopoly position
This company has a competitive advantage so strong that its rivals find it practically impossible to replicate.
What this business is made of
The business
Two steel rails no one will ever build again: the American Midwest with no alternative.
Union Pacific operates 51,000 km of rail track across 23 western U.S. states. It charges to move freight —grain, coal, chemicals, intermodal containers— from point A to point B. In 2025 it billed $24.5B and turned $7.1B into net income. It's a toll on the physical American economy.
Building a parallel rail network today is impossible: neither the capital nor the permits exist. They're a duopoly in the West with BNSF. The customer who wants to move 10,000 tons of grain has no real alternative at those prices. That's durable pricing power.
Revenue history
From $21.8B to $24.5B in 4 years. The business grows steadily.
Where each $100 of sales goes
Revenue $24.5B · FY2025
Of every $100 in sales, $71 goes to costs and operations; $29 is left as net profit (29% margin).
Catalysts and risks
Proposed merger with Norfolk Southern (announced 2025) would create the first transcontinental railroad in the U.S.
Operating ratio target below 60% would free up hundreds of millions in annual FCF.
Recovery of intermodal volume as supply chains normalize.
Debt of $30.3B against only $1.3B in cash —sensitive to interest rates.
Volume tied to a cyclical economy: recession means fewer loaded railcars.
Reported gross margin of 0% indicates the model is purely operating-cost based; no product cushion.
Charlie's note
“It's a business a ten-year-old would understand: it moves heavy things and charges a toll. It grows at 3%, not 30%, but it'll still be moving grain when half the trendy apps have vanished. Paying up for something boring and eternal usually ends well.”
Analysis · June 2026
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