TSX higher on employment data
OMAHA - Union Pacific (NYSE:UNP), a $130.2 billion market cap railroad giant with impressive gross profit margins of nearly 56%, has reached ratified agreements with 11 unions covering 12 crafts, representing 46% of the railroad’s craft employees, according to a company press release. InvestingPro analysis indicates the company is currently trading below its Fair Value, suggesting potential upside opportunity.
The railroad also secured interim agreements with two of its largest unions - the International Association of Sheet Metal, Air, Rail and Transportation Workers (SMART-TD) and the Brotherhood of Locomotive Engineers and Trainmen (BLET). These interim deals provide 3% pay increases that took effect September 1 while negotiations on long-term agreements continue. As a prominent player in the Ground Transportation industry generating $24.39 billion in revenue, Union Pacific maintains strong operational metrics while operating with moderate debt levels.
The 12 ratified long-term agreements cover five-year terms and include wage increases effective July 1, 2025, along with additional vacation time, health and welfare benefits, and work rule changes.
"It’s important we reward our employees without delay and acknowledge their contribution providing the safe, reliable service we sold our customers," said Union Pacific CEO Jim Vena in the statement.
The unions that ratified agreements include the National Conference of Firemen & Oilers, International Brotherhood of Boilermakers, International Association of Machinists and Aerospace Workers, International Brotherhood of Electrical Workers, Brotherhood of Railway Carmen, Brotherhood of Maintenance of Way Employees, Brotherhood of Railroad Signalmen, Transportation Communications Union, International Union of Operating Engineers, Iron Workers, SMART-MD, and the American Railway and Airway Supervisors Association.
Union Pacific operates in 23 western states, connecting customers and communities to the global economy. For deeper insights into Union Pacific’s financial health, operational metrics, and growth potential, investors can access comprehensive analysis through InvestingPro, which offers detailed Pro Research Reports covering 1,400+ top stocks, including UNP.
In other recent news, Union Pacific Railroad has announced the addition of 15 new Focus Sites across eight states, expanding its network and providing businesses access to its 32,000-mile rail system. This expansion spans Arkansas, Illinois, Kansas, Louisiana, Nebraska, Washington, Wisconsin, Oregon, and Texas. Additionally, Union Pacific’s proposed $85 billion acquisition of Norfolk Southern has faced criticism from Senate Democratic Leader Chuck Schumer, who labeled it a "hostile takeover of America’s infrastructure." Despite the controversy, RBC Capital raised its price target for Union Pacific to $276, citing the potential for revenue growth and operating synergies from the acquisition. Meanwhile, Argus has downgraded Union Pacific from Buy to Hold, noting the company’s already strong position in the rail industry. This downgrade highlights the company’s efficiency and the rail industry’s long-term growth compared to other transport options. These developments reflect significant changes and challenges facing Union Pacific as it navigates its expansion strategy.
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