Union Pacific: Tweak estimates (fuel, yields, below line); Maintain above-Street 2Q26e; PO $301

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Union Pacific: Tweak estimates (fuel, yields, below line); Maintain above-Street 2Q26e; PO $301

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Union Pacific

Tweak estimates (fuel, yields, below line);

Maintain above-Street 2Q26e; PO $301

Reiterate Rating: BUY | PO: 301.00 USD | Price: 267.21 USD

Slightly tweak our above-Street 2Q targets; maintain ’26e 25 June 2026

Union Pacific’s 2QTD volumes are trending up 2.4% year-year, slightly above our prior Equity

2.1% target. Following our fireside chat with CEO Jim Vena and CFO Jennifer Hamann

last week in London (see our report, NSC merger on the clock; Vols and service solid), we

Key Changesslightly tweak our above-Street 2Q26e EPS on fuel, yield, margin, and below the line

cost impacts. We target 2Q26 average rev/carload up 7.8% year-year (from our prior (US$) Previous Current

+5.0%), led by flow-through of elevated fuel prices. We believe Intermodal volume 2026E Rev (m) 25,776.2 26,126.5

strength (up 4.5% year-year vs our prior +3.6%) is led primarily by strong Domestic 2027E Rev (m) 26,884.5 26,980.3

conversion activity, which should support intra-Intermodal yields (we are +10% vs our 2028E Rev (m) 28,264.1 28,366.8

prior +7.5%), yet remain a drag on system rev/car as a whole. Given fuel impacts, we 2028E EPS 15.00 15.05

increase our 2Q26 fuel expense target (to $913 mil, up 59% year-year). UNP previously

noted it anticipates 2Q26 operating ratio to improve sequentially (we are 59.5%, a 40 Ken Hoexter

Research Analyst

bps improvement, from our prior 58.2% target), yet deteriorate year-year (we target a BofAS

140 bps deterioration) given fuel expense headwind and a tougher prior-year +1 646 855 1498 ken.hoexter@bofa.com

comparisons. Outside of Intermodal, volumes are supported by durable Energy & Adam Roszkowski, CFA