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Valued at $156.2 billion by market cap, Union Pacific Corporation (UNP) is a leading player in the transportation sector. Based in Omaha, Nebraska, the company operates the largest railroad network in North America, linking key U.S. ports and regions while also serving international routes.
Companies valued at $10 billion or more are generally considered "large-cap" stocks and Union Pacific Corporation fits this criterion perfectly. Union Pacific Corporation is renowned for its extensive rail network and dominance in freight railroad transportation, particularly west of the Mississippi River, where it holds a near-duopoly.
The railroad company has seen a slight dip from its 52-week high of $258.66, achieved in February. Even so, shares of UNP have risen 11.7% over the past three months, surpassing the broader Dow Jones Industrials Average's ($DOWI) 9.1% gains over the same time frame.
Longer term, UNP has returned 4.3% on a YTD basis, underperforming the DOWI's 10.3% increase. Moreover, shares of UNP have soared 14.6% over the past 52 weeks, compared to the DOWI's 19.3% returns over the same time frame.
Nevertheless, UNP stock has been trading above its 50-day moving average and has remained mostly above its 200-day moving average since mid-July.
Union Pacific Corporation has underperformed over the past year primarily due to a decline in carload volumes, particularly in its intermodal business, and a reduced operating margin. Moreover, the stock dipped marginally on Jul. 25 after the company reported Q2 revenue that fell short of analyst forecasts. But, UNP rebounded 2.1% the following day as investors reacted positively to the stronger-than-expected profit, driven by robust pricing power and increased volumes. This positive performance outweighed the challenges of reduced fuel surcharges and a less favorable business mix, boosting investor confidence.
Highlighting the stock's outperformance, its rival, CSX Corporation (CSX), is underperforming UNP, as evidenced by a rise of 11.5% over the past year and a 1.2% dip on a YTD basis.
Despite UNP's outperformance over the past three months, analysts are cautiously optimistic about its prospects. The stock has a consensus “Moderate Buy” rating overall from the 23 analysts in coverage, and the mean price target of $261.54 suggests a premium of only 2.1% to current levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
