Bank of America said it was time to buy Union Pacific after the company announced its current CEO, Lance Fritz, would step down this year. Analyst Ken Hoexter upgraded the rail operator’s stock to buy from neutral. Hoexter said the leadership change shows the company is prioritizing operational remediation after being flagged by the Surface Transportation Commission for poor service last year. “In our view, this highlights the service and inefficiencies UNP has experienced over the past few years, one of the reasons we were demoted last month,” Hoexter wrote today. Monday. “This also comes after the UNP was called to the Surface Transport Board (STB) in December to detail the use of embargoes and poor service, the first time a single rail line called since CSX in 2016.” The company expressed optimism about the leading candidate to replace Fritz — former Union Pacific CEO Jim Vena — citing his good track record at the company. However, BofA notes that aside from Vena, “the list of experienced replacements is very short.” Hoexter raised its price target to $241 from $218, implying a 25% gain from Friday’s closing price. Shares jumped 10% during premarket trading on Monday following the leadership change announcement. UNP 1D mountain UNP pops —CNBC’s Michael Bloom contributed to this report.