Citigroup: Joint venture The Pacific (UNP.US) has valuation and merger benefits, upgraded to "buy" rating.

Citigroup raised its rating on Union Pacific (UNP.US) from "neutral" to "buy" with a target price of $251. Citigroup analyst Ariel Rosa stated that the stock is very attractive and should not be overlooked. It is worth noting that even if the merger with Norfolk Southern Corporation is not successful, the bank still sees a bright future for the railway company. In particular, Rosa pointed out more specific information regarding the planned merger between Union Pacific and Norfolk Southern Corporation, although an anticipated contentious merger review process is expected. According to Rosa, the possibility of a smooth merger approval with fewer restrictions is between 65% to 70%. Rosa and his team also noted that Union Pacific's stock price has recently declined, despite its strong operational performance. The valuation of Union Pacific is also attractive. Rosa wrote, "For investors in Union Pacific, the good news is that the company's attractiveness is not dependent on the outcome of the transaction approval, as even in the case of an independent transaction, its stock price is below its long-term average price-to-earnings ratio, while its operational performance has been consistently strong."