| 2021 | 2022 | 2023 | 2024 (projected) | Gross Profit | 10.5B | 11.2B | 10.5B | 8.7B | Total Revenue | 21.8B | 24.9B | 24.1B | 15.7B |
Is Union Pacific (USA Stocks:UNP) spike viable based on latest volatility?
 | By Ellen Johnson | Macroaxis Story |
All aboard the volatility express! Union Pacific (UNP), a titan in the industrials sector and a key player in domestic ground transportation, has recently seen a significant surge in its stock price. Amid the current market volatility, this surge has raised eyebrows and prompted questions about its justification. With a strong buy consensus from analysts and a daily balance of power at 1.54, the bullish sentiment is hard to ignore. However, the accumulation distribution of 119.8K suggests a cautious approach. The company's valuation real value stands at $239.12, slightly below the day's median price of $239.87, indicating a potential downside. As we navigate these choppy market waters, it's crucial to assess whether Union Pacific's recent surge is a fleeting moment or a sustainable trend. Union Pacific is projected to yield negative returns, assuming a volatility of 0.9672% over a 90-day investment horizon. Given that many conservative investors remain indifferent to recent market risks, it's wise to assess Union Pacific's current volatility. We will evaluate the likelihood of Union Pacific generating above-average margins before the next press release.
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Reviewed by Rifka Kats
Despite Union Pacific's (UNP) recent surge, the stock's negative Total Risk Alpha of -0.08 and high Mean Deviation of 0.77 suggest that the stock may be overpriced and could be subject to significant volatility. Investors should be cautious as the stock's current price may not be sustainable given the current market volatility.
Major Takeaways
Union Pacific holds approximately 973 million in cash, with a positive cash flow from operations of 8.38 billion. This leads to a cash-per-share (CPS) ratio of 2.14.Volatility is a rate at which the price of Union Pacific or any other equity instrument increases or decreases for a given set of returns. It is measured by calculating the standard deviation of the annualized returns over a given period of time and shows the range to which the price of Union Pacific may increase or decrease. In other words, similar to Union's beta indicator, it measures the risk of Union Pacific and helps estimate the fluctuations that may happen in a short period of time. So if prices of Union Pacific fluctuate rapidly in a short time span, it is termed to have high volatility, and if it swings slowly in a more extended period, it is understood to have low volatility. Please read more on our technical analysis page.How important is Union Pacific's Liquidity
Union Pacific financial leverage refers to using borrowed capital as a funding source to finance Union Pacific ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Union Pacific financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Union Pacific's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Union Pacific's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between Union Pacific's total debt and its cash.
Union Pacific Gross Profit
Union Pacific Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Union Pacific previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Union Pacific Gross Profit growth over the last 10 years. Please check Union Pacific's gross profit and other fundamental indicators for more details.
Union Pacific Volatility Drivers
Union Pacific unsystematic risk is unique to Union Pacific and usually not directly affected by the market or economic environment. An example of unsystematic risk is the possibility of poor earnings or a layoff due to coronavirus. One may mitigate nonsystematic risk by buying different securities in the same industry or by buying in different sectors. For example, if you have a position in Union Pacific you can also buy Norfolk Southern. You can also mitigate this risk by investing in the industrials sector as well as in companies having nothing to do with it. This type of risk is also called diversifiable risk and can be understood from analyzing Union Pacific important indicators over time. Here we run a correlation analysis between relevant fundamental ratios over at least ten year period to find a relationship in the way they react to changes in Union Pacific income statement and balance sheet. Here are more details about Union volatility.Click cells to compare fundamentals
Breaking it down a bit more
Union Pacific reported the last year's revenue of 24.12 B. Total Income to common stockholders was 6.38 B with profit before taxes, overhead, and interest of 13.37 B.
Every cloud has a silver lining, and Union Pacific's (UNP) recent surge may be just that amid the current market volatility. Despite the turbulence, UNP's robust EBITDA of $11.48B and retained earnings of $62.09B demonstrate a strong financial backbone.Moreover, the company's shares are predominantly owned by institutions (82.24%), indicating a high level of confidence among savvy investors. However, with a probability of bankruptcy at 12.50%, investors should tread carefully. The stock's beta of 1.07 suggests it's slightly more volatile than the market, but its potential upside of 1.69 and a target price of $262.91 may make it a risk worth taking for some. .
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