NEW YORK (TheStreet) -- Shares of Union Pacific Corp. (UNP) - Get Report are lower by 2.07% to $108.53 in late morning trading on Thursday after analysts at Cowen downgraded the transportation companies' owner to "market perform" from "outperform."
The firm said it reduced its rating on Union Pacific based on the company's weak traffic performance, its exposure to slumping crude and frac shipments, and difficult agricultural products comparisons, theflyonthewall.com reports.
Cowen cut its price target to $122 from $138 on Union Pacific stock.
Union Pacific Corp.'s principal operating company is Union Pacific Railroad which connects 23 states in the western 66% of the U.S. Union Pacific Railroad's business includes a mix of agricultural products, automotive, chemicals, energy, industrial products and intermodal.
Separately, 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, impressive record of earnings per share growth, 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 analysis by TheStreet Ratings Team goes as follows:
- Powered by its strong earnings growth of 26.27% and other important driving factors, this stock has surged by 25.82% over the past year, outperforming the rise in the S&P 500 Index during the same period. 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 26.3% 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 $5.76 versus $4.72 in the prior year. This year, the market expects an improvement in earnings ($6.55 versus $5.76).
- Despite its growing revenue, the company underperformed as compared with the industry average of 14.0%. Since the same quarter one year prior, revenues slightly increased by 9.3%. 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.
- 46.51% 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 23.25% is above that of the industry average.
- You can view the full analysis from the report here: UNP Ratings Report