Union Pacific upgraded to Buy by UBS on stronger 2027 growth outlook

Union Pacific Corp (NYSE:UNP, XETRA:UNP) received a UBS upgrade to Buy from Neutral as the broker forecast stronger 2027 growth, excluding potential NSC merger benefits from its base case.

UBS raised its price target from $310 to $339, applying an unchanged multiple of 21 times its 2028 earnings forecast of $16.15 per share.

The bank expects intermodal volumes to grow 6% to 7% in 2027, citing current volume momentum and the relationship between intermodal performance and truckload pricing cycles.

Alongside industrial growth and a roughly neutral contribution from coal and grain, those intermodal gains underpin UBS’s forecast for 3.5% total volume growth in 2027.

Low inventories should support steel shipments, while elevated energy prices should sustain petroleum and products volumes, the broker said.

UBS expects pricing and freight mix to offset inflation, with volume growth and productivity gains helping lift 2027 earnings before interest and taxes by 10%.

Its earnings forecasts of $13.41 per share for 2026 and $14.90 for 2027 exceed market consensus by 3% and 5%, respectively.

With a merger, UBS estimates 2030 earnings of $19.40 to $21.90 per share, supporting upside valuations of $475 at year-end 2029 or $393 discounted back two years.

That upside assumes midpoint earnings and a four-point increase in the earnings multiple, but merger approval remains uncertain as UBS anticipates a challenging regulatory review.