Goldman Sachs analyst Jordan Alliger has maintained their bullish stance on UNP stock, giving a Buy rating on January 22.
Jordan Alliger has given a Buy rating due to a combination of factors, including Union Pacific’s recent performance and future outlook. The company’s operating EPS of $2.71 outpaced the Goldman Sachs and consensus forecasts of $2.40 and $2.57, respectively. This outperformance was attributed to improvements in operating ratio (OR) driven by productivity gains and higher-than-anticipated yield. Furthermore, despite a slow start to the year in terms of volume, Alliger points out that the second half of 2024 is expected to see an improvement in volumes, reinforcing the positive rating.
The economic forecast from Goldman Sachs, which projects a 2.3% year-over-year increase for 2024 industrial production growth, surpasses Union Pacific’s own indicators, suggesting potential for revenue growth. Alliger anticipates an average of over 200 basis points improvement in the operating ratio in the latter half of 2024. These factors, combined with a conservative guidance for 2024, suggest that Union Pacific’s stock holds promise for growth and justifies the Buy rating. Despite a reduction in the 2024 EPS estimate, the anticipated volume acceleration and subsequent OR improvement support a positive outlook for the company’s stock performance.
In another report released on January 22, Bernstein also upgraded the stock to a Buy with a $280.00 price target.
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Union Pacific (UNP) Company Description:
Founded in 1969, Nebraska-based Union Pacific Corp., through its principal subsidiary, Union Pacific Railroad Company, engages in railroad and freight transportation services. It offers transportation services for diversified business including agricultural products, food and beverage products, petroleum and gases, chemicals, coal, industrial products, intermodal and automotive.
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