Argus Sees Union Pacific (UNP) As A Compelling Opportunity

On May 16, Argus Research analyst Kristina Ruggeri pointed to Union Pacific Corp.’s (NYSE:UNP) recent underperformance as a buying opportunity. The analyst based his positive view on the company’s ability to maintain a healthy operating margin despite macro pressures. He attributed this solid performance to higher volumes, productivity gains, and better value-based pricing. Additionally, the analyst cited Union Pacific’s above-industry-average dividend yields of about 2.3% as positive for the stock. He reiterated his Buy rating on the stock with a price target of $275.

A freight train carrying railcar equipment in the foreground with a commercial area in the background.

A day before, BofA analyst Ken Hoexter raised his price target on Union Pacific Corp. (NYSE:UNP) to $262 from $256 while reiterating his Buy rating. However, their update was more broad-based as BofA analysts raised price targets and valuation multiples across the rails, less-than-truckload shippers, truckload shippers, and intermodal carriers industry. As per the report, they have become slightly more positive on this space as they now see increased volume flows at least until mid-Summer, compared to a recessionary outlook earlier. This led to upward estimate revisions across that industry.

UNP, as a railroad company, remains an integral part of the global supply chain. It enjoys stable fundamentals and a well-defined business strategy. By rail, it connects 23 U.S. states in the western two-thirds of the country.

While we acknowledge the potential of UNP as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than UNP and that has 100x upside potential, check out our report about the cheapest AI stock.

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Disclosure: None.