Union Pacific (UNP) Stock Forecast & Price Target

Union Pacific's financial outlook for 2025 is bolstered by anticipated core pricing gains, projecting a revenue growth of 5%, even amidst expected mix headwinds. The company's operational improvements are highlighted by a 6% productivity increase in its workforce, alongside enhanced asset utilization, which has contributed to cost controls in a challenging inflationary environment. Furthermore, total volumes are projected to maintain a growth trajectory of approximately 2.7%, supported by strong demand in sectors such as grain and industrial chemicals.

Union Pacific's stock outlook appears negative primarily due to a significant 9% year-over-year decline in premium revenue per unit (RPU), largely attributed to a shift in international volumes impacting domestic growth. The company's earnings per share (EPS) estimate has been revised down by five cents to $12.20, reflecting challenges in the bulk segment where coal volumes dropped nearly 20% year-over-year, despite gains in other commodities like grain and fertilizer. Additionally, the forecast suggests continued challenges in the intermodal and coal sectors, limiting improvements in operating ratios, while revenues fell short of projections by $20 million due to weaker RPU trends.