Kansas City Southern (KSU) Rating Increased to Buy at Zacks Investment Research
Kansas City Southern (NYSE:KSU) was upgraded by Zacks Investment Research from a “hold” rating to a “buy” rating in a note issued to investors on Monday. The brokerage currently has a $122.00 target price on the transportation company’s stock. Zacks Investment Research‘s target price suggests a potential upside of 14.23% from the stock’s current price.
According to Zacks, “Kansas City Southern's shares comfortably outperformed the industry it belongs to in the last six 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. Moreover, high fuel costs might limit bottom line growth going forward.”
A number of other equities research analysts also recently issued reports on KSU. Stifel Nicolaus reiterated a “buy” rating and issued a $118.00 price objective on shares of Kansas City Southern in a research report on Thursday, September 21st. Cowen and Company reissued a “hold” rating on shares of Kansas City Southern in a research note on Friday, August 25th. BMO Capital Markets restated a “hold” rating and set a $105.00 target price on shares of Kansas City Southern in a research report on Friday, August 25th. Bank of America Corporation boosted their target price on Kansas City Southern from $112.00 to $113.00 and gave the stock a “neutral” rating in a research report on Monday, August 21st. Finally, BidaskClub upgraded Kansas City Southern from a “buy” rating to a “strong-buy” rating in a research note on Friday, August 18th. Ten investment analysts have rated the stock with a hold rating, nine have given a buy rating and one has given a strong buy rating to the company. Kansas City Southern currently has an average rating of “Buy” and an average price target of $106.00.
Shares of Kansas City Southern (NYSE:KSU) opened at 106.80 on Monday. Kansas City Southern has a 1-year low of $79.05 and a 1-year high of $109.13. The firm has a market capitalization of $11.26 billion, a price-to-earnings ratio of 21.49 and a beta of 0.81. The company has a 50-day moving average price of $105.96 and a 200 day moving average price of $98.32.
Kansas City Southern (NYSE:KSU) last announced its quarterly earnings results on Friday, July 21st. The transportation company reported $1.33 EPS for the quarter, beating the Thomson Reuters’ consensus estimate of $1.26 by $0.07. The firm had revenue of $656.40 million during the quarter, compared to the consensus estimate of $627.81 million. Kansas City Southern had a net margin of 21.52% and a return on equity of 11.40%. The business’s quarterly revenue was up 15.5% compared to the same quarter last year. During the same period last year, the firm earned $1.22 EPS. On average, equities research analysts predict that Kansas City Southern will post $5.20 EPS for the current year.
Kansas City Southern declared that its Board of Directors has approved a share repurchase program on Tuesday, August 15th that allows the company to repurchase $800.00 million in outstanding shares. This repurchase authorization allows the transportation company to reacquire up to 7.1% of its stock through open market purchases. Stock repurchase programs are generally an indication that the company’s leadership believes its shares are undervalued.
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In related news, Director Antonio O. Garza sold 4,018 shares of the firm’s stock in a transaction that occurred on Tuesday, August 22nd. The stock was 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 transaction was disclosed in a filing with the SEC, which is available through this hyperlink. Also, insider Delano Jose Guillermo Zozaya sold 6,000 shares of the firm’s stock in a transaction that occurred on Monday, August 28th. The stock was sold at an average price of $102.93, for a total value of $617,580.00. Following the transaction, the insider now owns 42,087 shares in the company, valued at $4,332,014.91. The disclosure for this sale can be found here. In the last quarter, insiders sold 14,469 shares of company stock worth $1,522,510. 0.95% of the stock is owned by corporate insiders.
Institutional investors have recently made changes to their positions in the business. QS Investors LLC lifted its position in Kansas City Southern by 0.5% in the second quarter. QS Investors LLC now owns 1,320 shares of the transportation company’s stock valued at $138,000 after purchasing an additional 7 shares during the last quarter. San Francisco Sentry Investment Group CA purchased a new stake in shares of Kansas City Southern during the second quarter valued at approximately $160,000. V Wealth Management LLC purchased a new stake in shares of Kansas City Southern during the second quarter valued at approximately $169,000. Pacer Advisors Inc. boosted its stake in shares of Kansas City Southern by 3.1% during the first quarter. Pacer Advisors Inc. now owns 2,202 shares of the transportation company’s stock valued at $189,000 after purchasing an additional 66 shares during the period. Finally, Envestnet Asset Management Inc. boosted its stake in shares of Kansas City Southern by 2.4% during the first quarter. Envestnet Asset Management Inc. now owns 2,250 shares of the transportation company’s stock valued at $194,000 after purchasing an additional 52 shares during the period. 84.59% of the stock is currently owned by institutional investors and hedge funds.
About Kansas City Southern
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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