Union Pacific Corp.(UNP) delivered mixed fourth-quarter results characterized by double-digit revenue growth, albeit earnings missed consensus estimates.
The company leveraged its retail franchise to generate a positive business mix and core pricing gains amid global supply chain challenges. UNP shares rose 1.08% to close at $242.07 on January 20.
Union Pacific is a Nebraska-based company that engages in the railroad and freight transportation business. It offers transportation services for agricultural products, food, and beverages. Union Pacific dividends have increased steadily over the last 13 years leading to a dividend yield of 1.8%.
Q4 & Full Year Results
Operating revenue in the quarter jumped 12% year-over-year to $5.7 billion, exceeding consensus estimates of $5.64 billion. The increase was driven by higher fuel surcharge revenue and a positive business mix, partially offset by lower volumes. Revenue was up 12% year-over-year to $21.8 billion for the full year.
Meanwhile, UNP reported net income of $1.7 billion, or $2.66 per diluted share, slightly below the consensus estimate of $2.67 a share. Union pacific delivered earnings of $1.6 billion, or $2.36 per diluted share for the same quarter last year. For the full year, net income landed at $6.5 billion, or $9.95 per diluted share.
According to Chief Executive Officer Lance Fritz, 2021 marked the most profitable year as the company improved its fuel consumption for the third consecutive year. Additionally, Union pacific repurchased 5.8 million shares in the fourth quarter for an aggregate cost of $1.4 billion.
Last week, Barclays analyst Brandon Oglenski reiterated Buy rating on the stock and raised the price target to $280 from $260, implying 15.67% upside potential to current levels.
Consensus among analysts is a Strong Buy based on 15 Buys, and 4 Holds. At the time of writing, the average Union Pacific price target was $268.63, which implies 10.97% upside potential to current levels.
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