UBS Upgrades Union Pacific to Buy on Stronger Growth Outlook for 2027
UBS upgraded its rating for Union Pacific Corp (NYSE:UNP) from Neutral to Buy, citing a stronger growth outlook through 2027. The broker raised the price target from $310 to $339 based on an unchanged multiple of 21 times earnings forecasted at $16.15 per share for 2028. UBS anticipates intermodal volume growth of 6% to 7%, supported by current momentum and the link between truckload pricing cycles and performance in this segment. Combined with industrial expansion, stable coal and grain contributions, low steel inventories, and elevated energy prices sustaining petroleum volumes, UBS forecasts total volume growth of 3.5%. The bank also expects earnings before interest and taxes to rise by 10% due to productivity gains. UBS’s 2026 and 2027 EPS estimates exceed market consensus by 3% and 5%, respectively. While a potential merger with Norfolk Southern (NSC) could boost long-term valuations, regulatory hurdles remain significant.
Tickers: $UNP