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  "documentTitle": "Union Pacific Corporation (UNP)",
  "authorId": "15_Soroban",
  "authorName": "Eric Mandelblatt",
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  "presentationDate": "2023-02-22 00:00:00",
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  "notes": "Includes specific callouts for investor day guidance and a potential EPS upside scenario.",
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      "text": "Our estimates conservatively assume UNP only recaptures half the volume underperformance vs. US railroad peers that UNP experienced under current leadership.",
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      "text": "Volumes: we believe with best-in-class leadership volume growth can accelerate. Today, UNP volumes are 15-20% below peak. Under current leadership, US and Canadian Class I railroads have outgrown UNP in volumes by ~10% and ~17%, respectively",
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      "text": "Incremental Margins: UNP currently has substantial excess capacity, meaning additional volumes require de minimis capital investment as UNP is only running at ~80% of full network potential today. As a result, volume growth will come at very high incremental margins",
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      "text": "Our estimates conservatively assume UNP only recaptures half the volume underperformance vs. US railroad peers that UNP experienced under current leadership. We believe these estimates leave room for meaningful, long-term upside",
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      "text": "EPS: $17.90",
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      "text": "Investors believe management can do better than guided incremental margins of mid- to high 60%s: \"And then just to maybe clarify on the incremental margin range... mid- to high 60%s, I think maybe you can do a little bit better or towards the high end of the range because it sounds like you've got 60% to 70% capacity on the network, or you have 30% to 40% additional.\" - JP Morgan, May 2021 investor day",
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      "text": "\"I mean we've got capacity up to -- we [ran] over a decade ago close to 200k 7-day carloadings for the entire year. And we're around -- we're less than 170k today. So we've got excess capacity.\" - September 2019 conference",
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      "text": "\"I mean we've got capacity up to -- we [ran] over a decade ago close to 200k 7-day carloadings for the entire year. And we're around -- we're less than 170k today. So we've got excess capacity.\" — September 2019 conference",
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      "text": "Source: Bloomberg consensus estimates as of 2/22/2023. Note: investor day guidance 2025 estimates are extrapolated from each case's respective 2024 growth trend. (1) Conservatively assumes UNP only recaptures half the volume underperformance vs. US railroad peers that UNP experienced under current leadership. (2) Elevated due to excess costs in 2022 base.",
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      "text": "Illustrative Financial Overview comparing Best-in-Class Management Case vs Sell-Side Consensus Case across Sales, Operating Profit, and EPS metrics for 2022A-2025E.",
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      "text": "Soroban's estimates are significantly above consensus yet leave room for meaningful, long-term upside",
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