Union Pacific, CSX downgraded at Bernstein amid elevated inflationary pressure
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Bernstein is no longer bullish on Union Pacific (NYSE:UNP) and CSX Corp. (NASDAQ:CSX) according to a downgrade note released on Wednesday.

The analysis indicated that while third quarter figures should remain strong, the âreality of weaker volumes, moderation in pricing tailwinds, and elevated inflationâ are factors that the market must adjust to.

âBulls are not wrong that railroads can price through added costs over time, and that longer term the growth narrative is real, but the next shift in sentiment regarding fundamentals is likely to be negative given the challenging macro and elevated inflationary pressures,â the note explained. âWe would be trimming on strength as opposed to adding on weakness, and at current levels believe it will be difficult for these stocks to outperform benchmarks over the next 12 months.â

The firmâs analysts added that cost pressures âgo beyondâ the wage implications stemming from the ongoing labor dispute and PEB recommendations. 
As such, both stocks were downgraded to a Hold-equivalent rating from a prior Buy rating. Union Pacific (UNP) -1.63% and CSX Corp. (CSX) -1.05% declined modestly in pre-market trading. 
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