On Friday, Baird analysts increased the price target for Union Pacific (NYSE:UNP) shares to $265, up from the previous target of $260, while maintaining an Outperform rating. Currently trading at $248.05, the company commands a market capitalization of $150.38 billion. According to InvestingPro data, six analysts have recently revised their earnings expectations upward for the upcoming period. The firm's analysis highlighted Union Pacific's strong performance in the fourth quarter, which was attributed to effective operating leverage and the company's ability to scale capacity to meet increased international intermodal volume.
The analysts noted that Union Pacific's outlook for 2025 aligns with the objectives set during the 2024 Investor Day. The company is focused on achieving its three-year targets, which include a high-single to low-double-digit earnings per share (EPS) compound annual growth rate (CAGR), as well as maintaining industry-leading performance. With an impressive gross profit margin of 55.41% and a P/E ratio of 21.26, InvestingPro analysis reveals the company maintains strong financial health with an overall score of "GOOD."
Baird emphasized Union Pacific's robust margin performance despite a varied economic environment. They suggest that the company is well-positioned to benefit from potential macroeconomic growth. In the interim, Union Pacific is expected to continue benefiting from positive service and pricing trends.
Union Pacific was recognized by Baird as a top large-cap pick, with the firm citing the stock's quality and its still reasonable price. The endorsement reflects confidence in the company's strategy and its ability to deliver on its financial targets while navigating the current economic landscape. The company has maintained dividend payments for 54 consecutive years, demonstrating consistent shareholder returns. Discover more insights about Union Pacific's valuation and growth prospects through the comprehensive Pro Research Report available on InvestingPro.
In other recent news, Union Pacific Corporation has been the focus of adjustments in stock price targets by several analysts following its strong fourth-quarter earnings. Citi raised the company's stock price target to $260, maintaining a neutral rating. This adjustment came after Union Pacific reported an adjusted earnings per share (EPS) of $2.91 for the fourth quarter of 2024, surpassing both Citi's and the Street's estimates. TD Cowen also increased Union Pacific's stock price target to $258, maintaining a Buy rating. Stifel analysts raised their price target for Union Pacific to $270, reiterating a Buy rating. Jefferies analyst Stephanie Moore updated the price target for Union Pacific to $255, maintaining a Hold rating, while BMO Capital Markets increased the price target to $277, maintaining an Outperform rating.
These adjustments reflect the company's robust operating results, including an impressive gross profit margin of 55.4%, and its strong dividend history, having raised payouts for 18 consecutive years. Union Pacific's operating ratio for the quarter stood at 58.7%, indicating increased efficiency. These are recent developments that highlight Union Pacific's strong performance and future prospects.
Analysts from firms such as TD Cowen, Stifel, Jefferies, and BMO Capital expect Union Pacific to continue benefiting from productivity improvements and modest pricing gains. However, some analysts, like those from Citi and Jefferies, express caution due to Union Pacific's exposure to cross-border tariffs and an elevated valuation compared to its industry peers.
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