Bank of America upgrades Union Pacific after railroad operator says new CEO coming in 2023
Financial institution of America says it is time to purchase Union Pacific after the corporate introduced its present CEO, Lance Fritz, can be stepping down this 12 months. Analyst Ken Hoexter upgraded the railroad operator’s shares to purchase from impartial. Hoexter stated the management change reveals the corporate is prioritizing an operational repair after it was flagged for poor service by the Floor Transportation Board final 12 months. “This in our view highlights the service and operational underperformance UNP has skilled over the previous few years, one of many driving factors in our downgrade final month,” Hoexter wrote Monday. “It additionally follows UNP being known as to the Floor Transportation Board (STB) in December to element its use of embargoes and poor service, the primary time a single rail had been known as in since CSX in 2016.” The agency expressed optimism for the frontrunner for Fritz’s substitute — former Union Pacific COO Jim Vena — citing his sturdy observe report on the firm. Nevertheless, BofA famous that in addition to Vena, the “record of skilled replacements is brief.” Hoexter raised his worth goal to $241 from $218, implying a 25% upside from Friday’s closing worth. Shares had been up 10% throughout premarket buying and selling on Monday following the management change announcement. UNP 1D mountain UNP pops —CNBC’s Michael Bloom contributed to this report.