Union Pacific Set to Benefit From Continued Volume Gains in 2027, UBS Says

04:27 PM EDT, 09/16/2026 (MT Newswires) -- Union Pacific (UNP) is set to benefit from continued volume gains in 2027, along with pricing tailwinds, UBS Securities said Wednesday. The brokerage expects the railroad operator's total volume to grow 3.5% next year following an estimated 3.9% increase in 2026. The intermodal business volume is seen rising 6% to 7% in 2027, along with gains within the industrial segment, UBS analysts, including Thomas Wadewitz, said. "Our analysis of key customer markets points to a second year of strong volume growth in 2027 and our analysis of intermodal and merchandise pricing versus the truckload market points to a stronger tailwind from price," Wadewitz wrote. The investment firm upgraded its rating on Union Pacific's stock to buy from neutral and raised the price target to $339 from $310. UBS increased its earnings per share estimates to $13.41 from $13.33 for 2026 and to $14.90 from $14.75 for 2027. Wall Street expects $13.06 and $14.15, respectively, according to the brokerage. "The time lag of rail pricing to truck points to stronger pricing for (Union Pacific) and a price/mix (versus) inflation impact which is neutral rather than a headwind," Wadewitz said. A merger with Norfolk Southern (NSC) should drive upside for Union Pacific over the next 12 months, Wadewitz wrote. In 2025, Union Pacific agreed to acquire Norfolk in a cash-and-stock deal valuing the smaller railroad operator at about $85 billion. While the regulatory approval path remains unpredictable, a successful combination could result in pro-forma EPS in a range of $19.40 to $21.90 in 2030, UBS said. Union Pacific's shares closed 1.1% down on Wednesday, while Norfolk Southern's stock fell 1%. Norfolk Southern and Union Pacific reported stronger-than-expected second-quarter results in July amid robust freight demand and higher fuel surcharges. In July, US railroad operator CSX (CSX) posted a second-quarter beat on profit and revenue as volume increased, driven by intermodal growth. Price: 281.03, Change: -2.96, Percent Change: -1.04