Stock of the Day

October 17, 2022

Union Pacific (UNP)

$245.43
-$2.22 (-0.9%)
Market Cap: $148.38B

About Union Pacific

Union Pacific Corporation, through its subsidiary, Union Pacific Railroad Company, operates in the railroad business in the United States. The company offers transportation services for grain and grain products, fertilizers, food and refrigerated products, and coal and renewables to grain processors, animal feeders, ethanol producers, renewable biofuel producers, and other agricultural users; and construction products, industrial chemicals, plastics, forest products, specialized products, metals and ores, petroleum, liquid petroleum gases, soda ash, and sand, as well as finished automobiles, automotive parts, and merchandise in intermodal containers. Union Pacific Corporation was founded in 1862 and is headquartered in Omaha, Nebraska.

Union Pacific Bull Case

Here are some ways that investors could benefit from investing in Union Pacific Co.:

  • Union Pacific Co. has a strong market capitalization of $149.11 billion, indicating a robust financial position and stability in the market.
  • The company reported earnings per share of $2.91, surpassing analysts' expectations, which reflects strong operational performance and potential for future growth.
  • With a dividend yield of 2.17% and an annualized dividend of $5.36, investors can expect a steady income stream from their investment, which is appealing for income-focused investors.
  • Analysts have a consensus price target of $261.40, suggesting potential upside from the current stock price, which indicates positive market sentiment towards the stock.
  • The company has a high return on equity of 41.12%, demonstrating effective management and the ability to generate profits from shareholders' equity.

Union Pacific Bear Case

Investors should be bearish about investing in Union Pacific Co. for these reasons:

  • The stock has a relatively high P/E ratio of 22.24, which may indicate that it is overvalued compared to its earnings, potentially leading to a price correction.
  • There is a mixed analyst outlook with one sell rating and several hold ratings, suggesting uncertainty about the stock's future performance.
  • Recent downgrades from analysts, including a cut from a "hold" to a "sell" rating, may indicate concerns about the company's future growth prospects.
  • The price-to-earnings-growth ratio of 2.18 suggests that the stock may not be growing fast enough to justify its current valuation, which could deter growth-oriented investors.
  • Corporate insiders own only 0.28% of the company's stock, which may indicate a lack of confidence from those closest to the company regarding its future performance.

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