Union Pacific Stock Surges On Better-Than-Expected Q4 Earnings: Retail Sentiment Soars To Year-High
Earnings per share stood at $2.91 compared to a Wall Street estimate of $2.78. Total operating revenue declined 1% year-over-year (YoY) to $6.12 billion, slightly lower than an analyst estimate of $6.15 billion.
FollowShares of railroad operator Union Pacific Corp (UNP) jumped nearly 4% on Thursday after the company reported upbeat fourth-quarter earnings.
Earnings per share (EPS) for the fourth quarter (Q4) stood at $2.91 compared to a Wall Street estimate of $2.78. Total operating revenue declined 1% year-over-year (YoY) to $6.12 billion, slightly lower than an analyst estimate of $6.15 billion. Net income rose 7% YoY to $1.76 billion during the quarter.
The revenue was driven by lower fuel surcharge revenue, unfavorable business mix, and lower other revenue, partially offset by increased volume and core pricing gains.
Union Pacific highlighted that the company’s quarterly freight car velocity improved by 1% to 219 daily miles per car, while quarterly locomotive productivity declined by 3% to 136 gross ton-miles (GTMs) per horsepower day.
In its 2025 outlook, the company said that EPS growth is consistent with attaining the 3-year compound annual growth rate (CAGR) target of high single digits to low double digits.
Union Pacific has made no changes to its long-term capital allocation strategy and expects a capital plan of $3.4 billion and share repurchases of $4.0 to $4.5 billion.
The company, however, noted that volume has been impacted by a mixed economic backdrop, coal demand, and challenging year-over-year international intermodal comparisons.
On Stocktwits, retail sentiment jumped into the ‘extremely bullish’ territory (96/100) from ‘neutral’ a day ago, hitting a year-high level. The move was accompanied by ‘extremely high’ retail chatter.
UNP’s Sentiment Meter and Message Volume as of 9:00 a.m. ET on Jan. 23, 2025 | Source: Stocktwits
Recently, Stifel lowered the firm's price target on Union Pacific to $253 from $262 while keeping a ‘Buy rating on the shares as part of a broader research note previewing Q4 results for rail companies.
According to The Fly, Stifel expects modest volume growth and pricing improvements in 2025 but noted that this may not be significant enough to drive share price appreciation.
UNP stock has gained nearly 3% year-to-date but is down over 3% over the past year.
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