Q4 Earnings Preview for Union Pacific (UNP)

in EARNINGS/INVESTING IDEAS by

Union Pacific Corporation (NYSE:UNP) is scheduled to report Q4 earnings results on January 23, 2020, before markets open for trading.

The company is expected to report earnings of $2.05/share on revenue of $5.208 billion. The consensus earnings per share (EPS) of $2.05/share is based on a poll of 25 analysts and represents a decline of -3.3% over the same quarter last year when the company reported earnings of $2.12/share.

The revenue forecast of $5.208 billion based on a poll of 17 analysts implies a year-over-year (YoY) decline of -9.5%. Last year the company reported $5.757 billion in revenue for the quarter.

Expected to report EPS decline of -$0.07/share for Q4, 2019
Metric Expected Prior Year YoY Change
Revenue $5,208.25 $5,757.00 -9.5%
EPS $2.05 $2.12 -3.3%

Earnings Call Trends

Historically, management has exceeded analyst expectations 6 out of the last 8 tracked quarters, and missed expectations 2 quarters.

What are your expectations from Union Pacific for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q3, 2019 $2.30 $2.22 -3.5% Missed
Q2, 2019 $2.13 $2.22 4.2% Beat
Q1, 2019 $1.87 $1.93 3.0% Beat
Q4, 2018 $2.07 $2.12 2.3% Beat
Q3, 2018 $2.09 $2.15 2.9% Beat
Q2, 2018 $1.95 $1.98 1.5% Beat
Q1, 2018 $1.66 $1.68 1.3% Beat
Q4, 2017 $1.55 $1.53 -1.3% Missed

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report.

After the last earnings report for the period ending September 30, 2019, the stock price reacted by falling by -1.1%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
2019-10-17 $163.31 $161.50 -1.1% Decline
2019-07-18 $164.55 $175.30 6.5% Increase
2019-04-18 $169.28 $176.66 4.4% Increase
2019-01-24 $154.33 $160.95 4.3% Increase

Fundamentals And Technical Analysis

Union Pacific is currently trading at $182.46/share, down -1.5% for the day. The company is trading at approximately 98.3% of its 52-week high of $185.65/share. The company’s stock price is up 13.0% since the last earnings report and up 0.9% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 66.49 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.

NYSE:UNP Stock Price Chart Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 21.2x and a forward P/E multiple of 21.7x. UP’s current share price also implies a price-to-book (P/B) multiple of 7.1x. The following table summarizes some other key fundamental ratios:

Data as of January 21, 2020
Metric Value
Last Fiscal Period FY2019.Q3
Period End Date September 30, 2019
Stock Price (Current) $182.46
P/E Ratio 21.2x
P/E Ratio (Fwd) 21.7x
PEG Ratio 3.1
Total Debt to Capital (%) 17.7%
Levered Free Cash Flow $5.072 billion
Enterprise Value / EBITDA 14.3x

Source: Finbox

Company Profile: Union Pacific Corporation

Union Pacific Corporation is a large-cap stock with a market capitalization of $128.6 billion and a total enterprise value of $155 billion. The company operates in the Industrials sector and the Road & Rail industry.

Union Pacific Corporation engages in the railroad business in the United States. It offers transportation services for agricultural products, including grains, commodities produced from grains, fertilizers, and food and beverage products; coal and sand, as well as petroleum, liquid petroleum gases, and renewables; and construction products, industrial chemicals, plastics, forest products, specialized products, metals and ores, and soda ash, as well as intermodal and finished vehicles. As of December 31, 2018, its rail network included 32,236 route miles linking Pacific Coast and Gulf Coast ports with the Midwest and Eastern United States gateways.

Union Pacific Corporation was founded in 1862 and is headquartered in Omaha, Nebraska.

Expertise: financial modeling, mergers & acquisitions. Andy is also a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to do investment research. Andy’s background is in investment banking where he led the analysis on over 50 board advisory engagements involving mergers and acquisitions, fairness opinions and solvency opinions. Some of his board advisory highlights: - Sears Holdings Corp.’s $620 mm spin-off via rights offering of Sears Outlet, Hometown Stores and Sears Hardware Stores. - Cerberus Capital Management’s $3.3 bn acquisition of SUPERVALU Inc.’s New Albertsons, Inc. assets. Andy can be reached at andy@finbox.io or at +1 (516) 778-6257.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.