Update: Macquarie Ups Union Pac, Kansas City; Revisits RR Sector

Union Pacific Corp,

trended up slightly on Tuesday after an analyst named it his top pick in the railroad sector. Maquarie's Cleo Zagrean revisited ratings on a batch of stocks in the sector and upgraded Union Pacific to Outperform, from Neutral. Union Pacific is digging out from under rail network congestion problems faster than competition and it's less dependent on shipping Eastern coal. That, coupled with an analysts' conference slated by the company for November that could drive the shares higher, led Zagrean to boost his target on Union Pacific to $119 from $108. A growing market for delivering oil sands by rail to refineries leaves Union Pacific well-positioned relative to competition. Zagrean says the same for Kansas City Southern

, which he upgraded to Neutral from Under Perform. Kansas City's exposure to Mexico is also a bright spot. Mexican legislative uncertainty and delayed energy projects there remain risks, but automotive shipments and increasing volume growth prompted Zagrean to raise his KSU price target to $114, from $106. Headwinds for the whole industry include a weaker market for coal as well as prospects for tighter safety regulation on crude oil shipments, Zagrean said. In other sector ratings actions on Monday Zagrean: •Downgraded CSX Corp.

to Neutral, from Out Perform, citing heavy exposure to coal and lagging progress on overcoming network congestion. •Maintained Neutral ratings on Norfolk Southern Corp.

and Genesee & Wyoming Inc.

, citing Norfolk's coal exposure and Genesee's dependence on Australian iron ore. Union Pacific was up 0.3 percent Tuesday morning at 99.80 a share. Both Norfolk and Genesee were down by a like amount. Other shares in the sector were largely unchanged.