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Union Pacific (UNP) Slashes 2021 Volume Outlook, Stock Slips
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At the 2021 Stephens Annual Investor Conference held on Dec 1, Union Pacific (UNP - Free Report) reduced its forecast for full-year volumes and operating ratio as supply chain disruptions hit its shipments. Following this, shares of the company dipped 1% at the close of business on Dec 1.
While UNP reiterated its expectation of record financial performance in 2021, it lowered its volume growth forecast to approximately 4% from 5% expected earlier. Previously, in October, while releasing its third-quarter 2021 results, the company had slashed its volume growth forecast to 5% from 7%.
Supply chain disruptions are weighing on Union Pacific’s automotive and intermodal volumes. In the third quarter, automotive and intermodal volumes declined 18% and 6%, respectively. With this, the premium segment (which includes automotive and intermodal) volumes fell 9%. Persistent weakness in the premium segment, which accounted for 30.3% of UNP’s total freight revenues in the September quarter, might dent the company’s top line.
Union Pacific now anticipates operating ratio (operating expenses as a percentage of revenues) to improve around 150 basis points in 2021 from roughly 175 basis points the company had forecast while releasing third-quarter results in October. Additionally, UNP now estimates productivity of approximately $250 million for the full year.
Zacks Rank & Key Picks
Union Pacific carries a Zacks Rank #3 (Hold).
Here are some better-ranked stocks within the broader Transportation sector:
Schneider National (SNDR - Free Report) sports a Zacks Rank #1 (Strong Buy). The company has a stellar earnings surprise history, having outperformed the Zacks Consensus Estimate in each of the preceding four quarters, the average beat being 21%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Schneider National have rallied more than 16% so far this year.
Expeditors International of Washington (EXPD - Free Report) also sports a Zacks Rank #1. The company’s earnings have surpassed the Zacks Consensus Estimate in each of the preceding four quarters, the average beat being 29.1%.
Shares of Expeditors have appreciated nearly 30% so far this year.
Landstar System (LSTR - Free Report) carries a Zacks Rank #2 (Buy). The company’s earnings have trumped the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 11.4%.
Shares of Landstar have gained more than 26% so far this year.
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Union Pacific (UNP) Slashes 2021 Volume Outlook, Stock Slips
At the 2021 Stephens Annual Investor Conference held on Dec 1, Union Pacific (UNP - Free Report) reduced its forecast for full-year volumes and operating ratio as supply chain disruptions hit its shipments. Following this, shares of the company dipped 1% at the close of business on Dec 1.
While UNP reiterated its expectation of record financial performance in 2021, it lowered its volume growth forecast to approximately 4% from 5% expected earlier. Previously, in October, while releasing its third-quarter 2021 results, the company had slashed its volume growth forecast to 5% from 7%.
Supply chain disruptions are weighing on Union Pacific’s automotive and intermodal volumes. In the third quarter, automotive and intermodal volumes declined 18% and 6%, respectively. With this, the premium segment (which includes automotive and intermodal) volumes fell 9%. Persistent weakness in the premium segment, which accounted for 30.3% of UNP’s total freight revenues in the September quarter, might dent the company’s top line.
Union Pacific Corporation Price
Union Pacific Corporation price | Union Pacific Corporation Quote
Union Pacific now anticipates operating ratio (operating expenses as a percentage of revenues) to improve around 150 basis points in 2021 from roughly 175 basis points the company had forecast while releasing third-quarter results in October. Additionally, UNP now estimates productivity of approximately $250 million for the full year.
Zacks Rank & Key Picks
Union Pacific carries a Zacks Rank #3 (Hold).
Here are some better-ranked stocks within the broader Transportation sector:
Schneider National (SNDR - Free Report) sports a Zacks Rank #1 (Strong Buy). The company has a stellar earnings surprise history, having outperformed the Zacks Consensus Estimate in each of the preceding four quarters, the average beat being 21%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Schneider National have rallied more than 16% so far this year.
Expeditors International of Washington (EXPD - Free Report) also sports a Zacks Rank #1. The company’s earnings have surpassed the Zacks Consensus Estimate in each of the preceding four quarters, the average beat being 29.1%.
Shares of Expeditors have appreciated nearly 30% so far this year.
Landstar System (LSTR - Free Report) carries a Zacks Rank #2 (Buy). The company’s earnings have trumped the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 11.4%.
Shares of Landstar have gained more than 26% so far this year.