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Investing.com - JPMorgan raised its price target on Union Pacific (NYSE:UNP) to $267.00 from $241.00 on Friday, while maintaining a Neutral rating on the railroad operator’s stock. The transportation giant, currently valued at $133.28 billion, trades at a P/E ratio of 19.16. According to InvestingPro data, the stock shows impressive gross profit margins of 55.89%.
The price target increase follows Union Pacific’s strong second-quarter 2025 operating performance, according to JPMorgan’s research note.
Despite the positive operational results, JPMorgan noted that attention quickly shifted to Union Pacific’s announcement confirming advanced talks with Norfolk Southern (NYSE:NSC) regarding a potential combination.
The firm indicated that Union Pacific CEO Jim Vena provided insight into the underlying thesis for creating a transcontinental network, suggesting the process has been underway for some time and could be accelerating.
JPMorgan analysts believe multiple factors likely influenced Union Pacific’s decision to approach Norfolk Southern, including the current "stellar" operating performance of Union Pacific’s network.
In other recent news, Union Pacific reported adjusted earnings per share of $3.03 for the second quarter, surpassing both Benchmark’s estimate of $2.94 and the consensus forecast of $2.91. This performance was attributed to lower expenses and contributions from other income. In light of these results, Benchmark reiterated its Buy rating with a price target of $260.00. Jefferies also upgraded Union Pacific stock from Hold to Buy, raising its price target to $285.00, citing an attractive risk/reward setup. Bernstein SocGen Group increased its price target on Union Pacific to $286.00, maintaining an Outperform rating due to potential value creation from a transaction with Norfolk Southern. Meanwhile, Union Pacific is reportedly working with Morgan Stanley (NYSE:MS) to explore a potential acquisition of an unnamed rival, though specific details remain undisclosed. Warren Buffett clarified that Berkshire Hathaway (NYSE:BRKa)’s railroad BNSF is not collaborating with Goldman Sachs on any railroad takeover, countering previous reports. These developments highlight significant recent activities surrounding Union Pacific.
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