Kansas City Southern (KSU) Upgraded to “Buy” at 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 note released on Tuesday morning. They currently have $124.00 target price on the transportation company’s stock.
According to Zacks, “Shares of Kansas City Southern have outperformed the industry it belongs to in a year. The improvement in carload volumes is encouraging and is expected to aid results going forward. Improvement in operating margin too is a positive. We are also bullish on the company's efforts to reward shareholders dividend payments and buybacks. In line with this objective, the company hiked its quarterly dividend in excess of 9%, earlier this year. Moreover, its board cleared a new share repurchase program worth $800 million. However, declining businesss volumes at the Energy and Agriculture & Minerals units are concerning. Further, adding to its woes are high operating expenses.”
Other research analysts also recently issued research reports about the company. BidaskClub upgraded Kansas City Southern from a buy rating to a strong-buy rating in a report on Friday, August 18th. Stifel Nicolaus restated a buy rating and set a $118.00 price target (up previously from $114.00) on shares of Kansas City Southern in a report on Friday, August 18th. Bank of America boosted their price target on Kansas City Southern from $112.00 to $113.00 and gave the company a neutral rating in a report on Monday, August 21st. BMO Capital Markets restated a hold rating and set a $105.00 price target on shares of Kansas City Southern in a report on Friday, August 25th. Finally, Cowen restated a hold rating on shares of Kansas City Southern in a report on Friday, August 25th. Seven equities research analysts have rated the stock with a hold rating, eleven have given a buy rating and one has given a strong buy rating to the company’s stock. The company has a consensus rating of Buy and a consensus target price of $113.18.
Kansas City Southern (NYSE:KSU) last released its quarterly earnings data on Friday, October 20th. The transportation company reported $1.35 EPS for the quarter, topping the Thomson Reuters’ consensus estimate of $1.32 by $0.03. The firm had revenue of $653.00 million for the quarter, compared to the consensus estimate of $651.95 million. Kansas City Southern had a return on equity of 11.86% and a net margin of 21.42%. The company’s quarterly revenue was up 8.0% on a year-over-year basis. During the same quarter in the previous year, the business earned $1.12 earnings per share. equities analysts expect that Kansas City Southern will post 5.22 earnings per share for the current fiscal year.
Kansas City Southern announced that its Board of Directors has approved a share repurchase program on Tuesday, August 15th that authorizes the company to repurchase $800.00 million in outstanding shares. This repurchase authorization authorizes the transportation company to purchase up to 7.1% of its shares through open market purchases. Shares repurchase programs are generally an indication that the company’s leadership believes its stock is undervalued.
The business also recently declared a quarterly dividend, which will be paid on Wednesday, January 17th. Stockholders of record on Friday, December 29th will be given a $0.36 dividend. The ex-dividend date is Thursday, December 28th. This represents a $1.44 dividend on an annualized basis and a dividend yield of 1.31%. Kansas City Southern’s dividend payout ratio is currently 28.29%.
In related news, SVP Mary K. Stadler sold 1,973 shares of the company’s stock in a transaction that occurred on Tuesday, October 31st. The stock was sold at an average price of $103.91, for a total value of $205,014.43. Following the transaction, the senior vice president now directly owns 6,102 shares of the company’s stock, valued at approximately $634,058.82. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through this hyperlink. Also, COO Jeffrey M. Songer sold 3,000 shares of the stock in a transaction on Thursday, December 7th. The shares were sold at an average price of $111.80, for a total value of $335,400.00. The disclosure for this sale can be found here. Insiders own 0.95% of the company’s stock.
Several hedge funds and other institutional investors have recently added to or reduced their stakes in the company. QS Investors LLC lifted its holdings in shares of Kansas City Southern by 0.5% during the 2nd quarter. QS Investors LLC now owns 1,320 shares of the transportation company’s stock valued at $138,000 after buying an additional 7 shares during the period. Savant Capital LLC increased its stake in shares of Kansas City Southern by 0.4% in the 2nd quarter. Savant Capital LLC now owns 3,214 shares of the transportation company’s stock worth $336,000 after purchasing an additional 13 shares in the last quarter. Moors & Cabot Inc. increased its stake in shares of Kansas City Southern by 1.2% in the 2nd quarter. Moors & Cabot Inc. now owns 4,277 shares of the transportation company’s stock worth $447,000 after purchasing an additional 51 shares in the last quarter. Financial Counselors Inc. increased its stake in shares of Kansas City Southern by 0.4% in the 2nd quarter. Financial Counselors Inc. now owns 12,230 shares of the transportation company’s stock worth $1,280,000 after purchasing an additional 54 shares in the last quarter. Finally, Commonwealth of Pennsylvania Public School Empls Retrmt SYS increased its stake in shares of Kansas City Southern by 0.8% in the 2nd quarter. Commonwealth of Pennsylvania Public School Empls Retrmt SYS now owns 7,975 shares of the transportation company’s stock worth $835,000 after purchasing an additional 64 shares in the last quarter. 83.62% of the stock is currently owned by hedge funds and other institutional investors.
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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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