Union Pacific Q3 preview: Will earnings drive previous estimates on simpler quantity comps?

Union Pacific (NYSE:UNP) is scheduled to announce Q3 earnings outcomes on Thursday, Oct. 20, earlier than market open.

Consensus EPS estimate is $3.07 and consensus income estimate is $6.41B (+15.1% Y/Y).

During the last 1 yr, UNP has crushed EPS estimates 75% of the time and income estimates 50% of the time.

During the last 3 months, EPS estimates have seen 9 upward revisions and 13 downward. Income estimates have seen 18 upward revisions.

UBS is optimistic on the rails sector forward of earnings because the gasoline profit to working earnings may very well be 2-3x bigger than the tailwind seen in Q2.

Financial institution of America upgraded Union Pacific (UNP) to Purchase because it believes rail service has been bettering amid rebound in hiring and volumes.

Deutsche Financial institution believes Union Pacific (UNP) is a promising short-term commerce alternative, given simpler comparisons that ought to permit for robust headline quantity progress.

However, Bernstein is not bullish on Union Pacific (UNP) amid issues over weaker volumes, moderation in pricing tailwinds and elevated inflation. Nevertheless it expects Q3 outcomes to stay robust.

Daiwa downgraded the corporate to Impartial, warning that its earnings estimates and present valuations largely replicate above-industry income progress potential.

SA contributor Geoff Considine is bullish on Union Pacific (UNP) as a result of its improved valuation and its administration navigating labor points, gasoline prices, excessive inflation and decrease U.S. rail volumes.

Latest information:

• Railway staff and firms final month reached a tentative labor deal that might avert a nationwide strike.
• Union Pacific (UNP) inventory sank regardless of the agency’s outcomes topping estimates as buyers remained involved over effectivity, which was impacted by greater gasoline costs.

Shares of Union Pacific (UNP) slid 19.3% YTD, outperforming the S&P 500 and Dow Jones US Railroads indexes by a slim margin.