Baird Resumes Coverage of Union Pacific (UNP) Stock With a Neutral Rating

Union Pacific Corporation (NYSE:UNP) is one of the Top 10 Transportation and Industrial Stocks to Buy Now. Baird resumed coverage of the company’s stock with a “Neutral” rating and a price objective of $231, as reported by The Fly. The firm is resuming coverage on the broader trucking, logistics, and rail sectors and has a constructive, but balanced view of the near-term headwinds, risks, and earnings prospects. Furthermore, the firm’s analyst highlighted that the conditions that typically precede a turn are largely in place. However, how the remainder of 2025 unfolds is still uncertain.

Baird Resumes Coverage of Union Pacific (UNP) Stock With a Neutral Rating

An intermodal container train winding through a rural landscape.

In Q1 2025, Union Pacific Corporation (NYSE:UNP)’s operating revenue came in at $6.0 billion, which remained flat on 7% volume growth, while strong core pricing gains were offset by business mix, reduced fuel surcharge revenue, lower other revenue, as well as impact from the leap year. Freight revenue of $5.7 billion rose 1% despite a ~$70 million impact of having one less day in the quarter. Talking about the freight revenue drivers, Union Pacific Corporation (NYSE:UNP)’s robust volume growth in Q1 2025 added 650 bps to the freight revenue.

Union Pacific Corporation (NYSE:UNP) has affirmed its 2025 outlook. Its 2025 EPS growth is expected to be consistent with attaining its 3-year EPS CAGR view of high single to low double-digit growth. Bretton Capital Management, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:

“The main detractor was Dream Finders, taking 1.5% off the fund, and Union Pacific Corporation (NYSE:UNP) was a minor detractor with a -0.2% impact. The rail industry has seen tepid revenue growth the past few years as higher-revenue coal volume declines and is replaced by lower-revenue intermodal volume sourced from ocean and truck carriers. Despite the growth challenge, Union Pacific managed to cut costs and grow earnings per share by 6%. The stock returned -5%.”

While we acknowledge the potential of UNP to grow, 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 this cheapest AI stock.

READ NEXT: 13 Cheap AI Stocks to Buy According to Analysts and 11 Unstoppable Growth Stocks to Invest in Now

Disclosure: None. This article is originally published at Insider Monkey.