Shares of leading passenger and cargo carrier,
Union Pacific Corporation
) hit a new 52-week high of $105.87 on Aug 21, 2014. However, the
company ended yesterday's trading session a trifle lower at
$105.87, reflecting a solid 41.5% return over the past 12
Union Pacific's diverse franchise and strong value proposition
will offer growth opportunities across various sectors as the
economy continues to expand. Apart from volume growth, core pricing
above inflation will also lead to margin expansion and strong
returns to shareholders. The company is progressing well with its
operating and productivity improvement initiatives and has achieved
a second-quarter 2014 operating ratio of 63.5%, which makes
management confident of a sub 65% operating ratio before 2017.
Recently, Union Pacific reported strong second-quarter 2014
results, beating both the top and bottom line of the Zacks
Consensus Estimate. The company expects to grow on increased grain
shipments, continued demand for ethanol, imported beer delivery and
recovery in housing starts going forward. Strength in construction
products along with increased drilling activities will also boost
the industrial product business.
Notably, in the past one year, Union Pacific reported impressive
quarterly numbers. In two of the last four quarters, the company
surpassed the Zacks Consensus Estimate, with an average earnings
beat of 1.15%, including a positive surprise of 0.7% in the
previously concluded quarter. Over the last 30 days, the company
witnessed strong upward earnings estimate revisions for the current
quarter leading a 1.4% rise in the Zacks Consensus Estimate to
$1.48. Likewise, for the current year, the company witnessed upward
earnings estimate revisions translating into a 9.7% hike in the
Zacks Consensus Estimate to $5.53.
Union Pacific currently has a Zacks Rank #3 (Hold). Other stocks
that warrant a look in this sector include Trinity Industries Inc.
), GATX Corp. (
) and Canadian Pacific Railway Ltd (
). Trinity Industries sports a Zacks Rank #1 (Strong Buy), while
GATX Corp. and Canadian Pacific Railway carry a Zacks Rank #2
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