Union Pacific shares surged 5.50% during intraday trading on Thursday, as investors cheered the railroad operator’s second-quarter results that topped Wall Street estimates and an improved full-year outlook.

The Omaha, Nebraska-based company reported adjusted earnings of $3.41 per share for the quarter, up 12.5% from a year earlier and well above the analyst consensus of $3.24. Operating revenue rose 11.5% to $6.86 billion, also exceeding the $6.71 billion estimate, driven by strong freight demand, higher core pricing, and fuel surcharge revenue. Union Pacific also raised its full-year 2026 reported earnings per share growth outlook to high-single digit, up from a prior forecast of mid-single-digit growth.

Adding to the positive momentum, Union Pacific reached a deal with Canadian National Railway late Wednesday, under which CN will drop its opposition to Union Pacific’s proposed $71.5 billion merger with Norfolk Southern in exchange for expanded rail access in the Midwest. Separately, BofA Securities raised its price target on Union Pacific to $334 from $301, maintaining a Buy rating, citing the strong quarterly performance and improved growth prospects.