Union Pacific's stock paces Dow transports losers after Loop Capital downgrades 'unluckiest' railroad
Shares of Union Pacific Corp. sank 3.3% in afternoon trade Tuesday, to pace the Dow Jones Transportation Average's decliners, after Loop Capital analyst analyst Rick Paterson downgraded the railroad operator, citing concerns that the potential negative effects of recent weather events have yet to be priced in. Paterson cut his rating to hold, after being at buy for the past six months, and slashed his price target to $182 from $193. "Union Pacific wins the award for the world's unluckiest railroad in our view," Paterson wrote in a note to clients. "We thought last May's Oregon tunnel collapse was a cruel blow, but it as nothing compared to the one-two punch of the polar vortex and the Nebraska flooding that currently has the network reeling." Paterson said that while the weather events haven't hurt the stock--it closed at a record on Feb. 19--given the perception that the effects are short-term in nature, he believes what has happened is "going to pose a challenge to cost efficiency, service and growth" in at least the first half of the year. The stock has rallied 16.4% year to date while the Dow transports have climbed 12.3% and the Dow Jones Industrial Average has gained 11.2%. Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.