Price Target Increase#
Evercore ISI has raised its price target for Union Pacific stock (NYSE: UNP) from $262 to $277. This adjustment comes after the company reported its first-quarter earnings for 2026, which exceeded expectations. Evercore ISI has maintained an 'Outperform' rating, indicating they believe the stock will perform better than the market average.
Strong Earnings Performance#
In the first quarter of 2026, Union Pacific reported adjusted earnings per share (EPS) of $2.93, surpassing Evercore ISI's estimate of $2.89 and the broader market's average forecast of $2.86. The positive results were largely driven by productivity improvements, which helped the company manage costs effectively despite challenges such as fluctuating fuel prices and tough volume comparisons. The company achieved a gross profit margin of 56%, showcasing its operational efficiency.
Guidance and Future Estimates#
Union Pacific has largely maintained its guidance for 2026. Evercore ISI has slightly raised its full-year EPS forecast to $12.62 from $12.55, reflecting a growth rate of 5.3%. They also expect the company's operating ratio, a measure of efficiency, to be 59.3%. Additionally, Evercore ISI has increased its EPS estimate for 2027 to $13.85 from $13.78.
Market Reaction#
Following the earnings report, Union Pacific shares rose by 8.8%, reaching a 52-week high of $271.26. Evercore ISI noted that Union Pacific is trading at a lower valuation compared to its rail peers, suggesting potential for growth. However, some analyses indicate that the stock may be overvalued at its current price levels. In related news, Wolfe Research also raised its price target for Union Pacific shares to $309 from $291, further indicating a positive outlook for the company.