Evercore downgrades Union Pacific with ‘little upside left’

Evercore ISI analyst Jonathan Chappell downgraded Union Pacific to In Line from Outperform with a price target of $247, down from $254. Evercore still applies the second -highest target multiple of the peer group to Union Pacific on its new 2025 earnings estimate at 20-times, buy says there appears to be “little upside left” after the stock has been a top performer for the last three months. The main near-term headwind to Union Pacific’s revenue and earnings is mix as intermodal growth has dominated carload momentum over the last several months, the analyst tells investors in a research note. The firm took down Q3 and Q4 earnings estimates to reflect lower fuel surcharges and unfavorable mix. Union Pacific still has a “premier franchise with substantial growth opportunities” and exposure to the important Mexico trade, but the shares look fully valued based on the medium-term earnings outlook, contends Evercore.