Kansas City Southern (KSU) Upgraded to “Buy” by Zacks Investment Research
Zacks Investment Research upgraded shares of Kansas City Southern (NYSE:KSU) from a hold rating to a buy rating in a research report sent to investors on Friday morning. They currently have $115.00 target price on the transportation company’s stock.
According to Zacks, “Kansas City Southern's shares comfortably outperformed the industry it belongs to. The stock has gained 9.3%, as against the industry’s decline of 2.5% in the last three months. The improving scenario with respect to coal is aiding Kansas City Southern significantly. We are also bullish on the company's efforts to reward shareholders dividend payments and buybacks. In line with this objective, the company recently hiked its quarterly dividend in excess of 9%. Moreover, its board cleared a new share repurchase program worth $800 million. Sluggish intermodal revenues and high fuel costs, however, remain concerns.”
KSU has been the topic of several other research reports. Stifel Nicolaus reissued a buy rating and issued a $118.00 target price (up previously from $114.00) on shares of Kansas City Southern in a research note on Friday, August 18th. BidaskClub downgraded shares of Kansas City Southern from a strong-buy rating to a buy rating in a research note on Friday, July 28th. Bank of America Corporation raised their price target on shares of Kansas City Southern from $112.00 to $113.00 and gave the stock a neutral rating in a research note on Monday, August 21st. Aegis raised their price target on shares of Kansas City Southern from $110.00 to $115.00 and gave the stock a buy rating in a research note on Monday, June 19th. Finally, UBS AG reaffirmed a positive rating and issued a $117.00 price target (up previously from $103.00) on shares of Kansas City Southern in a research note on Monday, July 24th. Ten investment analysts have rated the stock with a hold rating, nine have issued a buy rating and one has assigned a strong buy rating to the company’s stock. The stock currently has an average rating of Buy and an average price target of $105.53.
Shares of Kansas City Southern (KSU) opened at 103.76 on Friday. Kansas City Southern has a 52 week low of $79.05 and a 52 week high of $109.13. The company has a market cap of $10.94 billion, a price-to-earnings ratio of 20.88 and a beta of 0.79. The stock’s 50 day moving average is $104.14 and its 200-day moving average is $95.35.
Kansas City Southern (NYSE:KSU) last announced its earnings results on Friday, July 21st. The transportation company reported $1.33 earnings per share for the quarter, beating the Thomson Reuters’ consensus estimate of $1.26 by $0.07. Kansas City Southern had a net margin of 21.52% and a return on equity of 11.40%. The business had revenue of $656.40 million for the quarter, compared to the consensus estimate of $627.81 million. During the same quarter in the prior year, the firm posted $1.22 earnings per share. The business’s revenue for the quarter was up 15.5% on a year-over-year basis. On average, equities analysts anticipate that Kansas City Southern will post $5.21 earnings per share for the current year.
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The firm also recently announced a quarterly dividend, which will be paid on Wednesday, October 4th. Shareholders of record on Monday, September 11th will be given a dividend of $0.36 per share. This is an increase from Kansas City Southern’s previous quarterly dividend of $0.33. The ex-dividend date of this dividend is Friday, September 8th. This represents a $1.44 dividend on an annualized basis and a yield of 1.39%. Kansas City Southern’s dividend payout ratio (DPR) is 26.51%.
Kansas City Southern declared that its board has approved a share repurchase plan on Tuesday, August 15th that allows the company to buyback $800.00 million in outstanding shares. This buyback authorization allows the transportation company to buy up to 7.1% of its shares through open market purchases. Shares buyback plans are often a sign that the company’s board believes its stock is undervalued.
In other Kansas City Southern news, Director Henry J. Maier bought 3,000 shares of the business’s stock in a transaction on Thursday, August 17th. The shares were acquired at an average price of $106.19 per share, with a total value of $318,570.00. Following the transaction, the director now owns 4,159 shares of the company’s stock, valued at approximately $441,644.21. The purchase was disclosed in a document filed with the SEC, which is accessible through this hyperlink. Also, Director Antonio O. Garza sold 4,018 shares of the firm’s stock in a transaction dated Tuesday, August 22nd. The shares were sold at an average price of $107.94, for a total transaction of $433,702.92. Following the transaction, the director now directly owns 4,920 shares in the company, valued at approximately $531,064.80. The disclosure for this sale can be found here. Insiders have sold a total of 14,469 shares of company stock worth $1,522,510 in the last three months. Insiders own 0.95% of the company’s stock.
Several large investors have recently added to or reduced their stakes in KSU. BlackRock Inc. boosted its holdings in shares of Kansas City Southern by 4,542.5% in the 1st quarter. BlackRock Inc. now owns 10,407,991 shares of the transportation company’s stock valued at $892,591,000 after buying an additional 10,183,801 shares in the last quarter. Massachusetts Financial Services Co. MA boosted its holdings in shares of Kansas City Southern by 588.6% in the 1st quarter. Massachusetts Financial Services Co. MA now owns 4,313,685 shares of the transportation company’s stock valued at $369,943,000 after buying an additional 3,687,248 shares in the last quarter. Pioneer Investment Management Inc. boosted its holdings in shares of Kansas City Southern by 103.8% in the 1st quarter. Pioneer Investment Management Inc. now owns 2,133,685 shares of the transportation company’s stock valued at $182,985,000 after buying an additional 1,086,853 shares in the last quarter. Sustainable Growth Advisers LP boosted its holdings in shares of Kansas City Southern by 49.4% in the 1st quarter. Sustainable Growth Advisers LP now owns 2,088,516 shares of the transportation company’s stock valued at $179,111,000 after buying an additional 690,470 shares in the last quarter. Finally, MARSHALL WACE ASIA Ltd bought a new stake in shares of Kansas City Southern in the 1st quarter valued at about $52,373,000. Institutional investors and hedge funds own 84.54% of the company’s stock.
Kansas City Southern Company Profile
Kansas City Southern (KCS) is a holding company. The Company has domestic and international rail operations in North America that are focused on the north/south freight corridor connecting commercial and industrial markets in the central United States with industrial cities in Mexico. The Company’s subsidiaries include The Kansas City Southern Railway Company (KCSR) and Kansas City Southern de Mexico, SA de C.V.
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