New CEO To Drive Efficiencies For Union Pacific Despite Weaker FY23 Outlook, Analyst Boosts Target By 15%
Portfolio Pulse from Nabaparna Bhattacharya
Benchmark analyst Nathan P. Martin has reiterated a Buy rating on Union Pacific Corporation (UNP), raising the price target to $264 from $230, despite the company's weaker FY23 outlook. UNP's Q2 FY23 operating revenue declined by 5% YoY to $5.96 billion, missing the consensus of $6.12 billion. The company cited softening consumer markets, inflation, one-time labor expense, and increased workforce levels as impacting factors. However, shares were up as the board announced that industry veteran Jim Vena would take over as CEO next month. The analyst lowered the 3Q EPS estimate to $2.83 from $2.97 and the full-year EPS estimate to $10.85 from $11.34.
July 27, 2023 | 7:03 pm
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POSITIVE IMPACT
Despite a weaker FY23 outlook and a Q2 FY23 revenue decline, Union Pacific Corporation's shares are expected to perform well due to the appointment of a new CEO and a raised price target by Benchmark analyst.
The appointment of a new CEO with a track record of driving efficiencies, coupled with a raised price target by a Benchmark analyst, are positive signals for UNP's stock. Despite a weaker FY23 outlook and a Q2 FY23 revenue decline, these factors could offset potential negative impacts and drive the stock's performance.
CONFIDENCE 85
IMPORTANCE 80
RELEVANCE 100