Union Pacific Corp Stock Buy Recommendation Reiterated (UNP)
NEW YORK (
)
(NYSE:
) has been reiterated by TheStreet Ratings as a buy with a ratings score of A+. 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 the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.
Highlights from the ratings report include:
- 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 35.32% 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 13.4% 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 $8.27 versus $6.72 in the prior year. This year, the market expects an improvement in earnings ($9.55 versus $8.27).
- Despite its growing revenue, the company underperformed as compared with the industry average of 3.8%. Since the same quarter one year prior, revenues slightly increased by 3.5%. 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.
- 39.10% 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 18.09% is above that of the industry average.
Union Pacific Corporation, through its subsidiary, Union Pacific Railroad Company, provides rail transportation services in North America. Union Pacific has a market cap of $72.5 billion and is part of the services sector and transportation industry. Shares are up 23.4% year to date as of the close of trading on Tuesday.
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--Written by a member of TheStreet Ratings Staff.
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