Loop Capital Downgrades Union Pacific (UNP) to Sell

Loop Capital analyst Rick Paterson downgraded Union Pacific (NYSE: UNP) from Hold to Sell with a price target of $200.00 (from $265.00).

The analyst comments "We're in upside down land where companies strengths suddenly become their weaknesses. Union Pacific is a good example. It's by far the biggest rail player in the North American auto supply chain, which will be upended by these tariffs and need to be completely reconstituted. In the meantime, Union Pacific is going to move a lot less autos and auto parts than it otherwise would have given North American produced vehicles are about to get a lot more expensive given multiple border transits required per vehicle. Union Pacific's other strength is access to Mexico, where it connects to all six rail gateways, including the biggest one at Laredo. Less border traffic and a likely Mexican recession doesn't help UP. It also owns 26% of Mexican railroad Ferromex, which may struggle. Union Pacific also hauls containers from China off the west coast, exports US grain to Mexico, and imports Mexican beer; all of which risk a slowdown in demand in the foreseeable future.'

For an analyst ratings summary and ratings history on Union Pacific click here. For more ratings news on Union Pacific click here.

Shares of Union Pacific closed at $247.79 yesterday.

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