NEW YORK (TheStreet) -- Union Pacific Corp (UNP - Get Report) stock has been upgraded to "outperform" from "sector perform," RBC Capital said Tuesday. The firm allocated an $115 price target, noting the company has solid growth potential and low earnings volatility.
TheStreet Ratings team rates UNION PACIFIC CORP as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:
"We rate UNION PACIFIC CORP (UNP) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, revenue growth, notable return on equity and expanding profit margins. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 32.07% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, UNP should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- UNION PACIFIC CORP has improved earnings per share by 17.2% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, UNION PACIFIC CORP increased its bottom line by earning $9.43 versus $8.27 in the prior year. This year, the market expects an improvement in earnings ($10.90 versus $9.43).
- Despite its growing revenue, the company underperformed as compared with the industry average of 9.3%. Since the same quarter one year prior, revenues slightly increased by 6.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Road & Rail industry and the overall market, UNION PACIFIC CORP's return on equity exceeds that of both the industry average and the S&P 500.
- 41.11% is the gross profit margin for UNION PACIFIC CORP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 19.29% is above that of the industry average.
- You can view the full analysis from the report here: UNP Ratings Report