Analyst Thomas Wadewitz from UBS maintained a Hold rating on Union Pacific and keeping the price target at $253.00.
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Thomas Wadewitz has given his Hold rating due to a combination of factors affecting Union Pacific’s performance and outlook. The company demonstrated strong operational execution in the third quarter, with improvements in key metrics such as car miles per day and operating ratio. However, despite these positive results, there are concerns about the company’s ability to sustain earnings growth in the fourth quarter due to weaker volumes in certain customer segments, particularly intermodal, energy, and auto parts.
Furthermore, while Union Pacific is well-positioned for a potential merger with Norfolk Southern Corporation, there are anticipated challenges from other railroads and shipper groups. The valuation of Union Pacific’s stock is based on a price-to-earnings ratio applied to future earnings estimates, which suggests limited upside potential. As a result, the combination of strong current performance but uncertain future growth prospects leads to a Hold rating.
In another report released yesterday, Goldman Sachs also maintained a Hold rating on the stock with a $263.00 price target.