Union Pacific (NYSE:UNP) Shares Gap Up After Better-Than-Expected Earnings

Key Points

• Union Pacific shares jumped after the company reported better-than-expected quarterly results, opening well above the prior close and trading up strongly in premarket activity.
• The railroad posted Q2 adjusted EPS of $3.41 versus estimates of $3.25, while revenue of $6.86 billion also beat expectations and rose 11.5% year over year.
• Management also highlighted stronger operating performance, with adjusted net income up 12% and adjusted diluted EPS up 13% from a year earlier, supported by volume growth.

Union Pacific Corporation (NYSE:UNP - Get Free Report) shares gapped up before the market opened on Thursday following a better than expected earnings announcement. The stock had previously closed at $292.56, but opened at $309.90. Union Pacific shares last traded at $310.7330, with a volume of 1,061,737 shares.

The railroad operator reported $3.41 EPS for the quarter, topping analysts' consensus estimates of $3.25 by $0.16. The business had revenue of $6.86 billion for the quarter, compared to analyst estimates of $6.72 billion. Union Pacific had a return on equity of 39.58% and a net margin of 29.20%.Union Pacific's revenue for the quarter was up 11.5% on a year-over-year basis. During the same period in the prior year, the company earned $3.03 EPS.

Union Pacific Dividend Announcement

The business also recently declared a quarterly dividend, which was paid on Tuesday, June 30th. Investors of record on Friday, May 29th were issued a $1.38 dividend. The ex-dividend date of this dividend was Friday, May 29th. This represents a $5.52 dividend on an annualized basis and a dividend yield of 1.8%. Union Pacific's dividend payout ratio (DPR) is currently 45.47%.

Key Union Pacific News

Here are the key news stories impacting Union Pacific this week:

• Positive Sentiment: Union Pacific posted adjusted Q2 EPS of $3.41, ahead of the $3.25 consensus, while revenue of $6.86 billion also beat expectations of $6.72 billion. The railroad said revenue rose 11.5% from a year earlier, pointing to solid operating momentum. Article Title
• Positive Sentiment: The company also reported that adjusted net income increased 12% and adjusted diluted EPS increased 13% year over year, with management citing stronger volume growth. Article Title
• Positive Sentiment: Union Pacific and CN announced a binding memorandum of understanding tied to Union Pacific’s proposed acquisition of Norfolk Southern, with CN agreeing not to oppose the deal in exchange for expanded access rights. Investors may view this as reducing merger uncertainty and improving the odds of regulatory approval. Article Title

Analyst Upgrades and Downgrades

A number of analysts have commented on UNP shares. Royal Bank Of Canada reaffirmed an "outperform" rating and set a $289.00 target price (up from $273.00) on shares of Union Pacific in a report on Friday, April 24th. Benchmark reaffirmed a "buy" rating and issued a $325.00 target price (up from $300.00) on shares of Union Pacific in a research note on Wednesday, July 15th. BMO Capital Markets reiterated a "market perform" rating and set a $285.00 price objective (up from $278.00) on shares of Union Pacific in a report on Friday, April 24th. JPMorgan Chase & Co. upped their target price on shares of Union Pacific from $275.00 to $304.00 and gave the stock a "neutral" rating in a research note on Friday, July 10th. Finally, Citigroup assumed coverage on shares of Union Pacific in a report on Wednesday, July 15th. They set an "outperform" rating for the company. Two investment analysts have rated the stock with a Strong Buy rating, thirteen have assigned a Buy rating and seven have assigned a Hold rating to the stock. According to data from MarketBeat.com, the company currently has a consensus rating of "Moderate Buy" and a consensus price target of $299.11.

Insider Activity

In other Union Pacific news, CFO Jennifer L. Hamann sold 2,000 shares of the company's stock in a transaction on Friday, April 24th. The shares were sold at an average price of $274.70, for a total value of $549,400.00. Following the transaction, the chief financial officer directly owned 114,642 shares in the company, valued at $31,492,157.40. The trade was a 1.71% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at this hyperlink. Also, EVP Eric J. Gehringer sold 2,991 shares of the firm's stock in a transaction dated Wednesday, June 3rd. The stock was sold at an average price of $263.96, for a total transaction of $789,504.36. Following the sale, the executive vice president owned 43,012 shares of the company's stock, valued at approximately $11,353,447.52. This represents a 6.50% decrease in their position. The SEC filing for this sale provides additional information. Insiders sold a total of 32,378 shares of company stock valued at $8,781,595 over the last three months. Insiders own 0.22% of the company's stock.

Institutional Trading of Union Pacific

Several institutional investors have recently added to or reduced their stakes in the company. Key Financial Inc boosted its holdings in Union Pacific by 2.1% in the 1st quarter. Key Financial Inc now owns 1,821 shares of the railroad operator's stock worth $442,000 after acquiring an additional 38 shares during the period. Members Trust Co raised its stake in shares of Union Pacific by 2.5% during the first quarter. Members Trust Co now owns 1,573 shares of the railroad operator's stock valued at $382,000 after purchasing an additional 38 shares during the period. EJMK Ventures LLC raised its stake in shares of Union Pacific by 4.0% during the first quarter. EJMK Ventures LLC now owns 1,016 shares of the railroad operator's stock valued at $247,000 after purchasing an additional 39 shares during the period. Wealthquest Corp lifted its position in shares of Union Pacific by 3.7% during the first quarter. Wealthquest Corp now owns 1,108 shares of the railroad operator's stock worth $269,000 after purchasing an additional 40 shares in the last quarter. Finally, Thurston Springer Miller Herd & Titak Inc. lifted its position in shares of Union Pacific by 5.3% during the second quarter. Thurston Springer Miller Herd & Titak Inc. now owns 791 shares of the railroad operator's stock worth $215,000 after purchasing an additional 40 shares in the last quarter. 80.38% of the stock is currently owned by institutional investors.

Union Pacific Stock Up 6.2%

The firm's 50 day moving average price is $273.68 and its two-hundred day moving average price is $257.46. The firm has a market capitalization of $184.44 billion, a PE ratio of 25.59, a P/E/G ratio of 3.07 and a beta of 0.96. The company has a quick ratio of 0.73, a current ratio of 0.92 and a debt-to-equity ratio of 1.53.

About Union Pacific

Union Pacific Corporation NYSE: UNP is one of the largest freight railroad companies in the United States. Its principal operating subsidiary, Union Pacific Railroad, has roots that trace back to the Pacific Railway Act of 1862 and the construction of the first transcontinental rail link completed in 1869. The company is headquartered in Omaha, Nebraska, and operates as a holding company for rail transportation and related services.

Union Pacific's core business is the movement of freight by rail across an extensive rail network serving the western two‑thirds of the United States.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.