Activist adds ‘another layer of pressure’ on Union Pacific, says Stephens

After Soroban Capital Partners issued a public letter and presentation to Union Pacific’s board asking the company to install new leadership and recommended CEO Lance Fritz be replaced with Jim Vena, who was the company’s COO from 2019-2020, Stephens noted that the company revealed in response that its CEO succession process commenced in March 2022 and that the board is currently planning a CEO transition in 2023. The firm thinks yesterday’s developments "add another level of pressure / accountability" around the company’s service improvement plans, regardless of the exact timing of a CEO transition, which it views positively. Stephens, which adds that its "long-held belief" is that Union Pacific has the best U.S. rail network structurally, maintains an Overweight rating and $230 price target on the stock.