(The following report appeared at NewRatings.com on February 17.)
NEW YORK — Analyst Thomas R Wadewitz of Bear Stearns downgrades Union Pacific (UNP) from “outperform” to “peer perform.”
Shares of Union Pacific, a leading provider of inter-modal services through truck-rail transfer facilities in the Western part of the United States, are currently trading at $64.84.
According to Bear Stearn’s research note published this morning, the current downgrade in rating is on account of the expectations of an adverse impact of the unfavourable weather conditions and high fuel prices on Union Pacific’s near-term earnings. The downgrade in rating also comes in the wake of a lack of visibility into the company’s operational performance, the analysts mention.
Bear Stearns maintains a favorable outlook on the company’s medium term revenues, although operational difficulties have led to decreased volumes during the past two weeks. However, the company’s ability to transform this revenue growth into earnings growth remains doubtful, the analysts mention. The pricing and productivity trends for the Western rails would improve gradually, the analysts believe.
The EPS estimate for 2004 is $4.70.