BMO Capital analyst Fadi Chamoun downgraded Union Pacific (UNP) to Market Perform from Outperform with a price target of $255, down from $270. The proposed merger of Union and Norfolk Southern (NSC) represents one of the most consequential developments in the rail industry in decades, with the potential to reshape competitive dynamics and the regulatory framework governing U.S. railroads, the analyst tells investors in a research note. The firm said that the risks extend beyond execution to the prospect of lasting regulatory changes that could impair the industry’s historical value-creation model. Given limited visibility into regulatory outcomes and continued softness in freight demand, the firm is adopting a cautious stance.
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