Trump announces trade deal with EU following months of negotiations
Investing.com - Benchmark has reiterated its Buy rating and $260.00 price target on Union Pacific (NYSE:UNP) following the railroad operator’s second-quarter earnings report. With a market capitalization of $134 billion, Union Pacific’s stock currently trades at $224.85, while analyst targets range from $213 to $286, according to InvestingPro data.
Union Pacific reported adjusted earnings per share of $3.03 for the second quarter, exceeding both Benchmark’s estimate of $2.94 and the consensus forecast of $2.91, driven by lower expenses and contributions from other income. The company maintains impressive gross profit margins of 55.9%, with nine analysts recently revising their earnings estimates upward for the upcoming period, as tracked by InvestingPro.
The company achieved record-setting operational metrics during the quarter, including all-time quarterly records in workforce productivity and train length, while delivering an intermodal service performance index of 99.
Despite ongoing uncertainty surrounding trade and macroeconomic conditions, Union Pacific reaffirmed its full-year outlook and longer-term guidance, which includes an industry-leading operating ratio and a three-year EPS compound annual growth rate in the high-single to low-double digits.
The company confirmed it is in advanced discussions with Norfolk Southern (NYSE:NSC) regarding a potential business combination, though CEO Jim Vena refrained from providing specific details due to ongoing negotiations.
In other recent news, Union Pacific has announced a 3% increase in its quarterly dividend, raising it to $1.38 per share. This marks the 19th consecutive year of increased annual dividends for the company, highlighting its consistent financial performance. Meanwhile, Union Pacific is reportedly working with Morgan Stanley (NYSE:MS) to explore a potential acquisition of an unnamed rival, although specific details about the target have not been disclosed. In a related development, Bernstein raised its price target for Union Pacific to $286, citing confidence in the potential value creation from a transaction with Norfolk Southern. Jefferies has also upgraded Union Pacific’s stock from Hold to Buy, setting a new price target of $285 due to an attractive risk/reward profile. Additionally, Warren Buffett has denied reports that BNSF, a Berkshire Hathaway-owned railroad, is working with Goldman Sachs on a takeover of a competing railroad. These developments underscore significant strategic movements and financial adjustments within the railroad industry.
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