Latest news with #JimVena
Yahoo
19 hours ago
- Business
- Yahoo
Is Merger on the Cards Between Union Pacific & Norfolk Southern?
The railroad industry is likely to witness a new merger. Reportedly, the companies in talks regarding the aforesaid merger are Union Pacific Corporation UNP and Norfolk Southern Corporation NSC. Headquartered in Omaha, NE, Union Pacific, through its subsidiary, Union Pacific Railroad Company, operates in the railroad business in the United States. Currently, UNP has a market capitalization of $134.35 billion. UNP carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Norfolk Southern, headquartered in Atlanta, GA, engages in the rail transportation of raw materials, intermediate products and finished goods in the United States. Currently, NSC has a market capitalization of $62.37 billion. NSC currently carries a Zacks Rank #4 (Sell). According to the sources, the discussions are in the 'early stage' and at present lack promise of going through or being accepted by regulatory bodies. However, none of the companies have yet confirmed anything on the merger. Earlier this year, Union Pacific,chief executive officer, Jim Vena hinted at the possible profits that are likely to result from such a merger. This includes the enhancement of transfer-based bottlenecks in places like Chicago, where West Coast operators and East Coast operators often offload cargo to be transferred to another operator's network. A merger between Union Pacific and Norfolk Southern will generate the first modern West-to-East single-line freight railroad in the United States. Though the merger may generate easy connectivity between East Coast and West Coast, like any other deal, this deal requires regulatory approvals from multiple sources, primarily the Surface Transportation Board. For approval, UNP and NSC need to show that the deal will boost competition and aid the public. Shippers usually oppose mergers because decreasing the number of railroads in the country may further limit their options for shipping goods. Notably, the regulatory burden for merging railroads has historically remained high. The significant merger in the railroad industry was in 2023, when Canadian Pacific CP acquired Kansas City Southern for $31 billion, creating CPKC railroad. Amid the uncertain merger news, we await the upcoming second-quarter 2025 earnings results of both companies. While UNP is scheduled to report second-quarter 2025 results on July 24, before market open, NSC is slated to post second-quarter 2025 results on July 29. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Union Pacific Corporation (UNP) : Free Stock Analysis Report Norfolk Southern Corporation (NSC) : Free Stock Analysis Report Canadian Pacific Kansas City Limited (CP) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Globe and Mail
21 hours ago
- Business
- Globe and Mail
Is Merger on the Cards Between Union Pacific & Norfolk Southern?
The railroad industry is likely to witness a new merger. Reportedly, the companies in talks regarding the aforesaid merger are Union Pacific Corporation UNP and Norfolk Southern Corporation NSC. Headquartered in Omaha, NE, Union Pacific, through its subsidiary, Union Pacific Railroad Company, operates in the railroad business in the United States. Currently, UNP has a market capitalization of $134.35 billion. UNP carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Norfolk Southern, headquartered in Atlanta, GA, engages in the rail transportation of raw materials, intermediate products and finished goods in the United States. Currently, NSC has a market capitalization of $62.37 billion. NSC currently carries a Zacks Rank #4 (Sell). According to the sources, the discussions are in the 'early stage' and at present lack promise of going through or being accepted by regulatory bodies. However, none of the companies have yet confirmed anything on the merger. Earlier this year, Union Pacific,chief executive officer, Jim Vena hinted at the possible profits that are likely to result from such a merger. This includes the enhancement of transfer-based bottlenecks in places like Chicago, where West Coast operators and East Coast operators often offload cargo to be transferred to another operator's network. A merger between Union Pacific and Norfolk Southern will generate the first modern West-to-East single-line freight railroad in the United States. Though the merger may generate easy connectivity between East Coast and West Coast, like any other deal, this deal requires regulatory approvals from multiple sources, primarily the Surface Transportation Board. For approval, UNP and NSC need to show that the deal will boost competition and aid the public. Shippers usually oppose mergers because decreasing the number of railroads in the country may further limit their options for shipping goods. Notably, the regulatory burden for merging railroads has historically remained high. The significant merger in the railroad industry was in 2023, when Canadian Pacific CP acquired Kansas City Southern for $31 billion, creating CPKC railroad. Amid the uncertain merger news, we await the upcoming second-quarter 2025 earnings results of both companies. While UNP is scheduled to report second-quarter 2025 results on July 24, before market open, NSC is slated to post second-quarter 2025 results on July 29. One Big Gain, Every Trading Day To help you take full advantage of this market, you're invited to access every stock recommendation in all our private portfolios - for just $1. Zacks private portfolio services that closed 256 double and triple-digit winners in 2024 alone. That's about one big gain every day the market was open. Of course, not all our picks are winners, but members have seen recent gains as high as +627% +1,340%, and +1,708%. Imagine how much you could profit with a steady stream of real-time picks from all our services that cover a number of strategies to suit a variety of investing and trading styles. See Stocks Now >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Union Pacific Corporation (UNP): Free Stock Analysis Report Norfolk Southern Corporation (NSC): Free Stock Analysis Report Canadian Pacific Kansas City Limited (CP): Free Stock Analysis Report
Business Insider
3 days ago
- Business
- Business Insider
M&A News: Union Pacific on Track for $200B Merger Deal with Rival Norfolk Southern
U.S.-based Union Pacific (UNP) is reportedly in early discussions with rival company Norfolk Southern (NSC) for a potential $200 billion merger. If the deal goes through, it would form a major rail powerhouse, reshaping the U.S. freight landscape and potentially triggering further consolidation in the industry. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week. Following the reports, NSC stock surged nearly 5% in after-hours trading, while UNP edged up 0.51%. Sources said the talks are still at an early stage and may not lead to a deal. Both Union Pacific and Norfolk Southern declined to comment. The Deal Rationale Union Pacific is one of the biggest freight railroads in the U.S., mainly covering the western two-thirds of the country. Norfolk Southern, on the other hand, operates across the eastern states. With this merger, Union Pacific would gain full access to Norfolk Southern's extensive eastern routes, creating a powerful coast-to-coast rail system and significantly expanding its national reach. Union Pacific CEO Jim Vena has recently highlighted the advantages of creating a transcontinental railroad. He believes such a network would enhance service by reducing delays at interchange points, where one railroad hands off railcars to another operator. Union Pacific–Norfolk Southern Deal Set for Regulatory Hurdles A key challenge for the deal will be convincing President Donald Trump's administration that it's a good move. However, analysts believe Union Pacific may be pursuing the merger in part because the current regulatory environment under Trump is seen as more business-friendly. In addition, the merger would likely face strong review from U.S. regulators, especially from the Surface Transportation Board, which oversees freight railroads and is currently led by Republican appointee Patrick Fuchs. The deal would also draw attention from the Justice Department, investors, Amtrak, and labor unions. Is Union Pacific Stock a Good Buy? On TipRanks, UNP stock has a consensus Moderate Buy rating among 21 Wall Street analysts. That rating is based on 14 Buys, six Holds, and one Sell assigned in the last three months. The average Union Pacific stock price target of $251.86 implies an 11% upside from current levels.
Reuters
4 days ago
- Business
- Reuters
Breakingviews - Railway mega-deal would require heavy engineering
NEW YORK, July 18 (Reuters Breakingviews) - It's somehow fitting that in a country where coal, polio and shipbuilding are making a comeback, there's also an 1860s-style transcontinental railway under consideration. Union Pacific is in talks to buy smaller rival Norfolk Southern, in a deal that would create a $240 billion coast-to-coast U.S. operator by value of combined stock and debt. The idea holds greater appeal than stoking fossil fuel consumption or reviving eradicated diseases, but it also risks having financially harmful effects. Consolidation ground to a halt after a series of mergers in the 1990s shrank dozens of freight carriers into just seven, and was blamed for derailments, disruptions and losses. The government introduced stiffer rules requiring that any large deal enhance competition rather than simply not hurt it. Anticipation of widespread regulatory rollbacks under the Trump administration and sluggish railroad growth prospects have changed the calculus, however, with Union Pacific CEO Jim Vena recently touting the advantages of a cross-country line before the Wall Street Journal reported, opens new tab early deal negotiations on Thursday. Setting aside how pliable Washington's Surface Transportation Board may be, connecting 50,000 track miles into one unified network has some logic. The existing regional system adds costs, including from transferring railcars and complicating service routes. With about 40% of all traffic directly tied, opens new tab to international trade, according to an industry group, higher tariffs also pose a fresh hurdle to increasing revenue at companies which have already firmly squeezed expenses. The harder question relates to value creation. The best, albeit imperfect, comparison is Canadian Pacific's 2023 acquisition of Kansas City Southern, which was grandfathered into the older merger rules, for $31 billion. The buyer promised, opens new tab $1 billion in annual synergies, the bulk coming from growth equal to about 8% of combined revenue and the rest from slashing almost 3% of combined operating expenses. On that basis, Union Pacific would be able to generate about $3.6 billion of synergies, according to Breakingviews estimates. Assuming Union Pacific were to pay the same 23% premium as Canadian Pacific did, valuing the Norfolk Southern enterprise at some $91 billion including net debt, the implied return on invested capital, with the revenue uplift and expense savings factored in, would be about 7%. To just match the target's 7.9% weighted average cost of capital, as estimated by Morningstar analysts, would require some $4.6 billion of synergies. That considerable sum may be within reach, at least according to Bernstein analysts. They see potential benefits of between $4 billion and $5 billion. At more than 12% of the top lines for both companies, or nearly a third of their total operating expenses, it sounds optimistic. Absent some creative engineering, the effort hardly looks worth the long haul. Follow Jeffrey Goldfarb on X, opens new tab and Linkedin, opens new tab.
Yahoo
5 days ago
- Business
- Yahoo
Union Pacific, Norfolk Southern discuss merger to create transcontinental railroad, AP source says
OMAHA, Neb. (AP) — Union Pacific and Norfolk Southern are in merger talks to create the largest railroad in North America that would connect the East and West Coasts. The merger discussions began during the first quarter of this year, according to a person familiar with the talks who isn't authorized to discuss them publicly. It would combine the largest and smallest of the country's six major freight railroads. Both railroads declined to comment. Within the industry there is widespread debate over whether such a merger would be approved by the Surface Transportation Board even though those regulators approved the deal that created CPKC railroad two years ago with the Canadian Pacific's $31 billion acquisition of Kansas City Southern railroad. That merger combined the two smallest major railroads in North America and left only six major freight railroads. But it was the first major rail merger approved in more than two decades. The bar for railroad mergers in the U.S. was raised substantially at the start of the century after a disastrous combination of Union Pacific and Southern Pacific in 1996 that snarled rail traffic for an extended period, followed by the 1999 split of Conrail between Norfolk Southern and CSX, which created backups in the East. Union Pacific CEO Jim Vena talked earlier this year about the potential benefits of such a merger because it would streamline deliveries all across the country by eliminating the delays that come along with one railroad handing shipments over to another. Plus it would simplify shipping for the companies that rely on railroads to deliver their raw materials and finished products. But in the past, shippers have raised concerns about the consequences of being left with even fewer options to ship their goods because the major railroads are already so powerful. Some investors have long argued that the industry should eventually consolidate down to two East-West railroads crossing the United States and one railroad in Canada. But regulators have been skeptical and taken a cautious approach. Any proposed deal would face a lengthy STB review. That board is currently evenly split between two Republicans and two Democrats with one seat open. Citi Research analyst Ariel Rosa said in a research note that a major transcontinental railroad merger 'would likely prove costly and time consuming, risking a years-long distraction to management, while facing significant pushback from regulators, politicians, employee unions, competitors, customers, and other stakeholders.' Union Pacific, which is based in Omaha, Nebraska, generated $24.3 billion revenue last year as its more than 30.000 employees delivered freight all across the western United States. Norfolk Southern reported $12.1 billion revenue and has roughly 20,000 employees and its headquarters is in Atlanta. Norfolk Southern stock gained 3.7% during the day Thursday and rose another 4.7% to hit $282.50 in after-market trading following the Journal's story. Josh Funk, The Associated Press
