BMO Lifts Union Pacific Price Target to $295; $1.2B Wabtec Modernization Deal
BMO Capital raised its price target on Union Pacific to $295 from $255, maintaining a Market Perform rating as a freight-cycle recovery still offers upside. Union Pacific signed a $1.2B Wabtec agreement to modernize 1,700 AC4400 locomotives, reducing fuel consumption 5% and increasing tractive effort 14%.
1. BMO Raises Price Target
On February 20, BMO Capital raised its price target on Union Pacific to $295 from $255 and maintained a Market Perform rating, citing continued freight-cycle recovery since late November 2025 that still offers upside for transportation stocks.
2. $1.2B Wabtec Modernization Deal
On February 4, Union Pacific signed a $1.2 billion agreement with Wabtec to modernize its AC4400 locomotive fleet, marking the largest rail-industry locomotive modernization investment ever and building on a 2022 order scheduled for completion in 2026.
3. Efficiency and Delivery Timeline
The program will upgrade over 1,700 locomotives with advanced control systems and diagnostics, cutting fuel consumption by 5%, increasing tractive effort by 14%, boosting reliability by 80% and extending useful life, with deliveries beginning in 2027 from U.S. facilities.