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On Friday, Loop Capital updated its outlook on Union Pacific (NYSE:UNP) shares, raising the price target slightly to $202 from the previous $200. Despite this increase, the firm maintained its Sell rating on the railroad company’s stock, which currently trades at $215.45 with a market capitalization of $129 billion. According to InvestingPro data, the stock trades near its 52-week low of $204.66, while maintaining impressive gross profit margins of 55.7%.
Union Pacific unveiled its first-quarter earnings for 2025 on Thursday, April 24. Following the report, Loop Capital’s analyst Rick Paterson made a modest adjustment to the price target. In a statement, Paterson noted, "Our refreshed estimates don’t materially change, while our price target upticks to $202 as we roll our earnings base forward by a quarter." He emphasized the decision to maintain the Sell rating, citing concerns over the impact of tariffs on the company’s operations. According to Paterson, these tariffs are expected to dampen rail volumes in the coming weeks. InvestingPro analysis reveals that 14 analysts have recently revised their earnings expectations downward, though the company maintains a strong dividend history, having raised payments for 18 consecutive years.
The updated price target reflects a narrow adjustment based on the progression of time rather than a significant change in the company’s valuation or performance. The analyst’s comments suggest that while the earnings report did not drastically alter their financial estimates, the forward-looking price target needed to be updated to align with the new earnings base.
The persisting Sell rating indicates that Loop Capital’s view on Union Pacific remains cautious. The specific mention of tariffs as a factor suggests that external economic policies are seen as a potential risk to the company’s near-term performance.
The firm’s stance is based on anticipated challenges for Union Pacific, highlighting the influence of trade policies on the transportation sector. As the analyst projects a suppression of rail volumes due to tariffs, this outlook could be indicative of the broader impacts such policies may have on the industry.
In other recent news, Union Pacific Corporation reported its first-quarter 2025 earnings, which missed analysts’ expectations on both earnings per share (EPS) and revenue. The company recorded an EPS of $2.70, falling short of the projected $2.76, and revenue of $6.03 billion, which did not meet the forecasted $6.10 billion. Despite flat net income and operating revenue compared to the previous year, Union Pacific achieved a 1% increase in freight revenue. The company highlighted improvements in operational metrics, such as workforce productivity and train length, while maintaining a stable operating ratio of 60.7%.
Union Pacific continues to focus on strategic goals, including a three-year EPS compound annual growth rate target of high single to low double digits. The company has set a share repurchase target of $4-4.5 billion for 2025, indicating a strong commitment to returning value to shareholders. However, potential risks, such as trade tensions and tariffs, could impact market segments and pose challenges to growth. Union Pacific’s leadership remains prepared for market volatility, emphasizing their strategic focus on safety, service, and operational excellence. The company also reported a 4% year-over-year increase in cash from operations, amounting to $2.2 billion, reflecting solid financial management despite the earnings miss.
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