Are Insiders Too Confident In Union Pacific Corporation (UNP)?

On December 03, 2019, Union Pacific Corporation (NYSE:UNP) shares lost -2.89% or -5 points to close at $168 with a heavy trading volume of 3.916 million shares. It opened the trading session at $170.9, the shares rose to $171.07 and dropped to $167.15, the range by which the price of stock traded the whole day. The company now has a market cap of $117 billion and currently has 698.93 million outstanding shares. Union Pacific Corporation (UNP) stock has plunged -2.63 percent of market value in 21 trading days.

UNP stock’s trailing 3-year beta is 1.08, meaning there will be a greater rate of return, although posing a higher risk. The part of a firm’s profit given to each outstanding share of regular stock was $8.49 share in the trailing 52 weeks. The stock’s value surged 21.54 percent year to date (YTD) compared to a rise of 9.25 percent in 52 week’s period. The firm’s shares are still trading -6.95 percent below its 1-year high of $180.54 and 31.17 percent up from 52-week low of $128.08. The average consensus ranking on the company is 2.3, on a ranging where 5 is equal to a consensus sell rating. In other words, the mean analyst recommendations are ranking this stock as a sell.

Union Pacific Corporation (UNP) is most likely going to rise 7.79 percent in the coming 12 months, as per price target approximations compiled by finviz. Nevertheless, they have set the price target at a $206-month high price target. This represents a whopping 22.62 percent increase from the current trading of shares. The 52-week median price target given by the analysts is $183, which means a return possibility of 8.93 percent in comparison with the closing price of the stock of $168 on December 03. The lowest price set for the stock is $136 — just above -19.05 percent from UNP share price now.

Past records have indicated that shares in Union Pacific Corporation rose on 22 different earnings reaction days and we have yet to see whether this trend will play out and remain in place when the company reports upcoming earnings. Investors will get the next hint of UNP’s Q4 earnings on January 23. Analysts are predicting revenue to suffer decline of -6.5 percent to $5.39B in the financial fourth quarter, while EPS will soar by about 1.89 percent to $2.16 per share. In the last quarter, it earnings of $1.93 per share came better than the $1.8745, adjusted, expected by Thomson Reuters consensus estimate. Revenue for the quarter was $5.52B, missing the $5.65B analysts had expected. Earnings are seen to rise by 30.7 percent this year, 12.22 percent in the coming year and the trend continues by 10.26 percent every year in the next 5 years.

Let’s take a glimpse at some insider activity at Union Pacific Corporation (NYSE:UNP) and observe the pattern. The earliest insider trade happened on 07/31/2019. KNIGHT ROBERT M JR parted with a total of 8.62 thousand shares of the firm at average share price of $180.04. The total amount for the sale was set at $1.55 million. On completing this exchange, the EVP & CHIEF FINANCIAL OFFICER account balance was 382.73 thousand shares. The stock lost -6.69 percent from that insider sale. On 05/20/2019, DeLaney William J III, Director, did a purchase of 5 thousand shares at a price of $174.06 per share. This increased 870.3 thousand shares to the insider’s fortune and the stock experienced a -3.48 percent retreat in price since the news became public. This exchange saw 5 thousand shares get into the Director account.

On 05/03/2019, EVP & CHIEF FINANCIAL OFFICER KNIGHT ROBERT M JR recorded a sale transaction valued at $248.41 thousand. The sale at $180.01 a share has eliminated 1.38 thousand shares from the insider’s portfolio position. Meanwhile, shares price witnessed -6.67 percent decrease since the transaction reporting date. The company insider is left with 390.32 thousand shares remaining in the account. Ferguson Rhonda S, who works as EVP CLO & CORP SEC at the company, performed a sale of 11.49 thousand shares in a transaction worth $2.01 million. The disposal recorded on 04/18/2019 was priced at $175 per share. The stock price plunged -4 percent since the transaction. Ferguson Rhonda S currently holds a stake of 42.37 thousand in UNP stock which is worth $7.12 million after the insider selling.

The stock is lingering around the initial support level of $166.41. After this, the following support is at the zone of $164.82. Up until the time the UNP stock hit levels beyond the current one, bulls should have no alarm. In terms of its momentum, the stock’s RSI hit 41.36 on the daily chart, and this may be a cause for concern. In case the price goes below $164.82 level on closing basis, there may be more profit booking with the stock growing weaker. Still, getting to the $170.33 level may cause a pull-back move approaching $172.66 mark.

Union Pacific Corporation (UNP) shares are trading at a P/E ratio of 19.8 times earnings posted in the trailing 12 months. The industry UNP deals with has an average P/E of 19.2. Its P/B ratio is standing at 6.5X compared to the 4.1 industry average. It is additionally sporting a 5.4 on the Price-to-Sales ratio, compared to the industry’s P/S average of 4.4. Union Pacific Corporation has a 79.6% gross profit margin, with its operating margin around 38.9%. Alongside this, the company’s net profit margin currently stands at 27.3%.