Redburn Atlantic has upgraded $UNP from Neutral to Buy with a fresh price target of $259. The catalyst? A noticeable transformation in how Union Pacific runs its operations—leaner, faster, and more efficient—combined with stronger cargo volumes.
📉 Over the last year and a half, Union Pacific has made meaningful strides in its service delivery, cutting back on workforce while still managing to move more freight. That kind of operational leverage is rare in railroads. As a result, gross profit margins have climbed to 55.6%, with a healthy market cap sitting at $131.9 billion.
📦 Volume trends are also turning heads. Expectations for Q1 2025 freight volume are higher than earlier estimates, which adds fuel to the bullish case. Despite the stock trading about 14% below recent highs, analysts see this as a sweet spot—near fair value but primed for upside.
💰 Union Pacific has not been shy about capital moves either. A new $1.5 billion buyback plan and a $2 billion corporate note issuance show it’s making calculated bets on its future. Add in a tentative new labor agreement that improves worker compensation, and the company’s groundwork looks solid from all angles.
💸 As for dividends, $UNP continues to impress. It offers a forward yield of 2.11% and boasts an 18-year streak of dividend increases. With a payout ratio around 48%, there’s room to maintain and potentially grow payouts while funding strategic initiatives.
📅 All eyes will be on Union Pacific’s earnings release on April 24, 2025. If results align with Redburn Atlantic’s bullish view, $UNP could accelerate toward that $259 target—and maybe beyond.
📌 With better execution, capital discipline, and consistent shareholder returns, $UNP is no longer just a safe bet. It’s a stock regaining momentum—and deserving a spot back on investors’ watchlists.