NEW YORK (TheStreet) -- Shares of Union Pacific (UNP - Get Report) fell 0.6% to $101.78 in late morning trading Thursday as railroad stocks declined after Kansas City Southern (KSU) withdrew its 2015 revenue and volume guidance at an investor conference.
Executives at the company cautioned investors about the "uncertainty" in the energy markets, U.S. fuel prices, and currency volatility at the Bank of America/Merrill Lynch Transportation Conference, according to the Wall Street Journal.
The company reiterated its operating ratio goal of low-60s by 2017 and authorized a share buyback program of up to $500 million.
The news sent down other railroad stocks, such as Union Pacific and Canadian National Railway (CNI), on Thursday.
More than 5 million shares of Union Pacific had changed hands as of 11:26 a.m., compared to the daily average volume of 4,886,920.
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, growth in earnings per share, increase in net income, 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:
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- UNION PACIFIC CORP has improved earnings per share by 9.2% 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 $5.76 versus $4.72 in the prior year. This year, the market expects an improvement in earnings ($6.25 versus $5.76).
- The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Road & Rail industry average. The net income increased by 5.8% when compared to the same quarter one year prior, going from $1,088.00 million to $1,151.00 million.
- 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. When compared to other companies in the Road & Rail industry and the overall market, UNION PACIFIC CORP's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
- 43.96% 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 20.50% is above that of the industry average.
- You can view the full analysis from the report here: UNP Ratings Report