Jefferies Reiterates “Buy” on Union Pacific Following Management Meeting; Target, Estimates Boosted (UNP)
Railroad operator Union Pacific Corporation ( UNP ) on Tuesday caught some positive commentary from analysts at Jefferies & Co.
The firm maintained its "Buy" on UNP and raised its price target from $107 to $122. That new target suggests a 17% upside to the stock's Monday closing price of $105.49.
A Jefferies analyst commented, "We hosted a meeting with UNP's management on Friday afternoon at their offices in Omaha, NE. Q&A centered on: (1) the timing and magnitude of legacy contract repricings; (2) opportunities in the shale and gas market; and (3) the opportunity in the road to rail intermodal conversions. We came out of the meeting with increased confidence in the growth opportunities in 2012 and more clarity on UNP's drivers towards the long term goal of a 65% to 67% operating ratio (OR) by 2015."
Accordingly, Jefferies boosted its full-year 2012 earnings forecast for UNP from $7.66 per share to $7.82, while maintaining its $9 per-share estimate for 2013.
Union Pacific shares were unchanged in premarket trading Tuesday.
The Bottom Line
Shares of Union Pacific ( UNP ) have a 2.29% dividend yield, based on last night's closing stock price of $104.59. The stock has technical support in the $95 price area. The shares are trading near all-time highs and have little overhead resistance.
Union Pacific Corporation ( UNP ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.
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