Kansas City Southern (KSU) Raised to Hold at Zacks Investment Research

Zacks Investment Research upgraded shares of Kansas City Southern (NYSE:KSU) from a sell rating to a hold rating in a research report report published on Friday morning.

According to Zacks, “Kansas City Southern is being aided by  growth in overall carload volumes. It anticipates volume growth of 3-4% in the current year. Moreover, the company expects volume growth to accelerate in the latter half of 2018 and 2019, backed by a strong economy and network capacity investments. Addititionally, the United States-Mexico-Canada Agreement (USMCA) is another positive for the company. Kansas City Southern's measures to reward shareholders through dividend payments and buybacks are also encouraging. However, high operating expenses are a cause for concern. Increase in fuel costs have contributed to the rise in toatal expenses. High operating expenses have led to the deterioration in operating ratio. Declining revenues at the Energy segment are also worrisome and has the potential to hinder top-line growth in turn. The company's third-quarter results will be available on Oct 19.”

Several other equities analysts also recently commented on KSU. Bank of America cut their price objective on Kansas City Southern from $134.00 to $130.00 and set a buy rating on the stock in a research report on Monday, October 1st. Credit Suisse Group upped their price objective on Kansas City Southern from $125.00 to $126.00 and gave the company a $111.08 rating in a research report on Monday, July 23rd. Loop Capital upped their price objective on Kansas City Southern to $132.00 and gave the company a buy rating in a research report on Monday, July 23rd. Cowen reaffirmed a hold rating and issued a $124.00 price objective on shares of Kansas City Southern in a research report on Monday, July 23rd. Finally, Morgan Stanley upped their price objective on Kansas City Southern from $106.00 to $108.00 and gave the company a $111.08 rating in a research report on Monday, July 23rd. Five research analysts have rated the stock with a hold rating, six have given a buy rating and one has assigned a strong buy rating to the company. The company currently has a consensus rating of Buy and an average target price of $123.54.

NYSE KSU opened at $112.18 on Friday. The company has a market cap of $11.57 billion, a PE ratio of 21.37, a P/E/G ratio of 1.43 and a beta of 0.82. The company has a debt-to-equity ratio of 0.54, a quick ratio of 0.85 and a current ratio of 1.20. Kansas City Southern has a fifty-two week low of $99.47 and a fifty-two week high of $120.34.

Kansas City Southern (NYSE:KSU) last released its earnings results on Friday, July 20th. The transportation company reported $1.54 earnings per share for the quarter, beating the Thomson Reuters’ consensus estimate of $1.52 by $0.02. The firm had revenue of $682.40 million for the quarter, compared to the consensus estimate of $686.12 million. Kansas City Southern had a return on equity of 12.01% and a net margin of 36.91%. The company’s revenue for the quarter was up 4.0% compared to the same quarter last year. During the same quarter in the previous year, the company posted $1.33 EPS. On average, equities analysts expect that Kansas City Southern will post 6.08 earnings per share for the current year.

The firm also recently disclosed a quarterly dividend, which was paid on Wednesday, October 3rd. Shareholders of record on Monday, September 10th were given a $0.36 dividend. This represents a $1.44 annualized dividend and a yield of 1.28%. The ex-dividend date was Friday, September 7th. Kansas City Southern’s dividend payout ratio (DPR) is presently 27.43%.

In other news, VP Suzanne M. Grafton sold 729 shares of the stock in a transaction on Wednesday, August 29th. The stock was sold at an average price of $119.78, for a total transaction of $87,319.62. Following the transaction, the vice president now owns 10,580 shares of the company’s stock, valued at approximately $1,267,272.40. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available through this link. Also, CFO Michael W. Upchurch sold 5,442 shares of the stock in a transaction on Thursday, July 26th. The stock was sold at an average price of $116.77, for a total value of $635,462.34. Following the transaction, the chief financial officer now directly owns 17,906 shares in the company, valued at approximately $2,090,883.62. The disclosure for this sale can be found here. Insiders have sold a total of 7,171 shares of company stock worth $841,712 in the last three months. Corporate insiders own 0.70% of the company’s stock.

Several institutional investors and hedge funds have recently bought and sold shares of KSU. Massachusetts Financial Services Co. MA grew its position in shares of Kansas City Southern by 5.9% during the 2nd quarter. Massachusetts Financial Services Co. MA now owns 9,864,888 shares of the transportation company’s stock worth $1,045,284,000 after buying an additional 545,885 shares in the last quarter. Strs Ohio grew its position in shares of Kansas City Southern by 2,565.6% during the 2nd quarter. Strs Ohio now owns 379,876 shares of the transportation company’s stock worth $40,251,000 after buying an additional 365,625 shares in the last quarter. Renaissance Technologies LLC grew its position in shares of Kansas City Southern by 67.7% during the 2nd quarter. Renaissance Technologies LLC now owns 811,600 shares of the transportation company’s stock worth $85,997,000 after buying an additional 327,700 shares in the last quarter. UBS Group AG grew its position in shares of Kansas City Southern by 658.9% during the 1st quarter. UBS Group AG now owns 334,936 shares of the transportation company’s stock worth $36,792,000 after buying an additional 290,799 shares in the last quarter. Finally, Bank of America Corp DE grew its position in shares of Kansas City Southern by 32.3% during the 2nd quarter. Bank of America Corp DE now owns 1,186,541 shares of the transportation company’s stock worth $125,724,000 after buying an additional 289,457 shares in the last quarter. 87.63% of the stock is currently owned by institutional investors and hedge funds.

About Kansas City Southern

Kansas City Southern, through its subsidiaries, provides domestic and international rail transportation services in North America. It serves a ten-state region in the midwest and southeast regions of the United States and has the shortest north/south rail route between Kansas City, Missouri, and ports along the Gulf of Mexico in Alabama, Louisiana, Mississippi, and Texas.

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