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Union Pacific Corporation (UNP) is strengthening its presence in Kansas City through a newlease agreement with Jaguar Transport Holdings LLC. Per the deal, Union Pacific will lease about 12 acres of land and four miles of track in central Kansas City to Jaguar Transport. Through this partnership, UNP aims to offer short-line rail services in the Central Industrial District in Kansas City. This shall enhance customer service and boost regional economic growth.
Jaguar Transport is a transportation logistics company engaged in short-line rail, warehousing and transload services. Apart from its short-line services, Jaguar owns a cold and dry storage warehouse adjacent to the leased property and is in the final stages of constructing a new transload facility on the site. This facility is anticipated to start accepting railcars in the near future, thereby widening the logistics capabilities in the area.
Deal Benefits for UNP
The deal allows UNP to concentrate on the long-haul service from the site in central Kansas City while Jaguar will operate through its new shortline railroad, the Kansas City West Bottoms Railroad.The Kansas City West Bottoms Railroad will provide five-day-a-week short-haul services through which local businesses can easily connect to UNP’s extensive rail network. Overall, the new business partnership is expected to generate operational efficiencies and unique business opportunities for the greater Kansas City area.
Kenny Rocker, executive vice president of marketing and sales for Union Pacific, stated, "Jaguar has a proven track record of providing premier customer service, and we believe this operating change will be a win for both railroads, our mutual customers and the local economy. Both parties have high expectations for growth under this exciting new deal."
Zacks Rank and Price Performance of the UNP Stock
UNP currently carries a Zacks Rank #3 (Hold).
Shares of Union Pacific have gained 3.5% so far this year, outperforming the Zacks Transportation - Rail industry’s 0.5% surge.
UNP Stock YTD Price Comparison
Image Source: Zacks Investment Research
Stocks to Consider
Investors interested in the Zacks Transportation sector may also consider some better-ranked stocks like SkyWest SKYW and Frontier Group ULCC.
SkyWest
SkyWest currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
SKYW has an expected earnings growth rate of 16% for the current year. The company has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average beat of 16.7%. Shares of SKYW have risen 9.1% over the past six months.