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Shares of Union Pacific Corporation (UNP) rose 1.1% on Thursday after the freight-hauling railroad company posted better-than-expected second-quarter 2021 results.
Revenues came in at $5.5 billion and exceeded consensus estimates of $5.28 billion, jumping 30% year-over-year. The increase in revenues was due to a surge in freight revenues which increased 29% to $5.13 billion.
Earnings of $2.72 per share jumped 16.8% year-over-year and beat analysts’ expectations of $2.40 per share.
The company reported an operating ratio of 55.1%, which improved by 590 basis points year-over-year.
Union Pacific CEO Lance Fritz said, “As we move into the second half of 2021, we will continue working with our customers and the broader supply chain to increase fluidity and efficiently handle the strong demand for freight transportation.” (See UNP stock charts on TipRanks)
Following the Q2 results announcement, Cowen & Co. analyst Jason Seidl reiterated a Buy rating on the stock but increased the price target to $239 from $238. This implies 8.9% upside potential to current levels.
The rest of the Street is cautiously optimistic about the stock, with a Moderate Buy consensus rating based on 11 Buys and 5 Holds. The average UNP price target of $244.94 implies 11.6% upside potential from current levels. Shares have gained 25.5% over the past year.
Union Pacific scores a “Perfect 10” from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.