Union Pacific

Analyst Listing

The following analysts provide coverage for the subject firm as of May 2016:

Broker Analyst Analyst Email
Credit Suisse Allison M. Landry allison.landry@credit-suisse.com
Susquehanna Financial Group Bascome Majors bascome.majors@sig.com
Cleveland Research Company Bryan Merolla bmerolla@cleveland-research.com
TD Securities Cherilyn Radbourne cherilyn.radbourne@tdsecurities.com
Bernstein Research David Vernon david.vernon@bernstein.com
Avondale Partners Donald Broughton dbroughton@avondalepartnersllc.com
BMO Capital Markets Fadi Chamoun fadi.chamoun@bmo.com
Cowen & Company Jason H. Seidl jason.seidl@cowen.com
Buckingham Research Jeffrey Kauffman jkauffman@buckresearch.com
RBC Capital Markets John Barnes john.barnes@rbccm.com
Argus Research John Eade jeade@argusresearch.com
Stifel Nicolaus John G. Larkin jglarkin@stifel.com
Stephens Inc Justin Long justin.long@stephens.com
Morningstar Keith Schoonmaker keith.schoonmaker@morningstar.com
BB&T Capital Markets Mark A. Levin mlevin@bbandtcm.com
Nomura Research Matt Troy matt.troy@nomura.com
Raymond James Patrick Tyler Brown tyler.brown@raymondjames.com
Topeka Capital Markets Rick Paterson rp@topekacapitalmarkets.com
Deutsche Bank Research Robert Salmon robert.salmon@db.com
Wolfe Research Scott H. Group sgroup@wolferesearch.com
Scotiabank GBM Turan Quettawala turan.quettawala@scotiabank.com

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Primary Input Data

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Derived Input Data

Derived Input

Label

2015 Value

2016
Value

Equational Form

Net Operating Profit Less Adjusted Taxes NOPLAT  5,234  4,727 NOPLAT\, =\, EBIT\, x\, (1 \,-\, Avg \,\,Tax\,\, Rate\,\, on\,\, EBIT)
Free Cash Flow FCF 2,694 4,020 FCF\,=NOPLAT\,+\,Non-Cash\,Expenses-\Delta NWC\,-\,NCS
Tax Shield TS 234 261 TS\,=\,Interest\,\,Paid\,\,x\,\, Avg \,\,Tax\,\,Rate\,\, on\,\, Pre-Tax\,\, Income
Invested Capital IC 51,394 53,115 IC\,=\,Fixed\,\,Operating\,\,Assets\,\,+\,\,Net\,\, Working\,\, Capital
Return on Invested Capital ROIC 10.18% 8.90% ROIC\,=\,\frac { NOPLAT }{ IC }
Net Investment NetInv 4,455 3,759 NetInv\,=\,{ {IC}_{1}}-{{IC}_{0}}+Depreciation
Investment Rate IR  85.12% 79.53% IR\,=\,\frac {NetInv}{NOPLAT}
Weighted Average Cost of Capital
WACCMarket 25.01% 28.21% WACC\,=\,\frac { E }{ V } { R }_{ E }\,+\,\frac { P }{ V } { R }_{ P }\,+\,\frac { D }{ V } { R }_{ D }\left( 1- Avg\,\, Tax\,\,Rate\,\,on\,\,Pre-Tax\,\,Income \right)
 WACCBook  8.96%  8.05%
Enterprise value
EVMarket 78,892 98,791 EV\,=\,Market\,\,Cap\,\,Equity\,+\,\,Long\,\,Term\,\,Debt\,-\,Cash
 EVBook   78,678  97,497
Long-Run Growth
g = IR x ROIC
  8.67%  7.08% Long-run growth rates of the income variable are used in the Continuing Value portion of the valuation models.
g = % \Delta GDP    2.50%   2.50%
Margin from Operations M   36.91%  36.47% M\,\,=\,\,\frac{EBIT}{SALES}
Depreciation/Amortization Rate D  19.99%  21.89% D\,\,=\,\,\frac{D+A}{EBITDA}

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Valuation Multiple Outcomes

The outcomes presented in this study are the result of original input data, derived data, and synthesized inputs.

Equational Form

Observed Value

Single-stage

multiple g solution

Two-stage valuation

model g solution

12/31/2015 12/31/2016 12/31/2015 12/31/2016 12/31/2015 12/31/2016

EV/SALES 

\frac {EV}{Sales} \,= \,\frac{ROIC\,  -\,  g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)\,(M)

 3.62  4.95 52.71%  50.66%  31.28% 33.00%

EV/EBITDA

\frac {EV}{EBITDA} \,= \,\frac{ROIC\,  -\,  g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)\,(1\,-\,D)

7.84 10.61 52.71% 50.66% 31.28% 33.00%

EV/NOPLAT

\frac {EV}{NOPLAT} \,= \,\frac{ROIC\,  -\,  g}{ROIC\,(WACC\,-\,g)}

15.07 20.90 52.71% 50.66% 31.28% 33.00%

EV/FCFOPS

\frac {EV}{FCF_{OPS}} \,= \,\frac{ROIC\,  -\,  g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)

29.28 24.57 52.71% 50.66% 31.28% 33.00%

EV/EBIT

\frac {EV}{EBIT} \,= \,\frac{ROIC\,  -\,  g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)

9.80 13.59 52.71% 50.66% 31.28% 33.00%

EV/IC

\frac {EV}{IC} \,= \,\frac{ROIC\,  -\,  g}{WACC\,-\,g}

1.54 1.86 52.71% 50.66% 31.28% 33.00%

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