Kansas City Southern (KSU) Lifted 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 sent to investors on Wednesday morning.
According to Zacks, “Kansas City Southern has been benefitting from growth in overall carload volumes. The metric increased 2% in the first nine months of 2018, on the back of volume growth at its key divisions. Removal of the North American Free Trade Agreement (NAFTA) overhang is a major positive for the company as it derives a significant portion of revenues from Mexico. Kansas City Southern's measures to reward shareholders through dividend payments and buybacks are also laudable. However, the company's high operating expenses are a cause for concern. Increase in fuel costs have contributed to the rise in total expenses. Declining revenues and volumes at the Energy segment are also worrisome and may hurt top line growth going forward. In fact, shares of Kansas City Southern have underperformed its industry in a year's time.”
Several other research analysts have also recently weighed in on KSU. ValuEngine raised Kansas City Southern from a sell rating to a hold rating in a research note on Monday, November 26th. Citigroup decreased their target price on Kansas City Southern from $123.00 to $120.00 and set a buy rating for the company in a research note on Friday, November 2nd. Loop Capital raised their target price on Kansas City Southern to $140.00 and gave the company a buy rating in a research note on Tuesday, August 28th. Seaport Global Securities raised Kansas City Southern from a neutral rating to a buy rating in a research note on Monday, October 22nd. They noted that the move was a valuation call. Finally, Deutsche Bank assumed coverage on Kansas City Southern in a research report on Tuesday, September 4th. They issued a hold rating and a $119.00 price target for the company. Three investment analysts have rated the stock with a hold rating, eight have assigned a buy rating and one has assigned a strong buy rating to the stock. The company presently has a consensus rating of Buy and a consensus price target of $126.64.
Kansas City Southern (NYSE:KSU) last announced its earnings results on Friday, October 19th. The transportation company reported $1.57 earnings per share for the quarter, meeting the Thomson Reuters’ consensus estimate of $1.57. Kansas City Southern had a return on equity of 11.98% and a net margin of 37.98%. The business had revenue of $699.00 million during the quarter, compared to analysts’ expectations of $708.19 million. During the same quarter last year, the business posted $1.35 earnings per share. The company’s quarterly revenue was up 6.5% on a year-over-year basis. As a group, sell-side analysts predict that Kansas City Southern will post 5.99 EPS for the current fiscal year.
The business also recently declared a quarterly dividend, which will be paid on Wednesday, January 16th. Investors of record on Monday, December 31st will be given a $0.36 dividend. The ex-dividend date of this dividend is Friday, December 28th. This represents a $1.44 dividend on an annualized basis and a dividend yield of 1.47%. Kansas City Southern’s dividend payout ratio (DPR) is 27.43%.
In related news, Director Henry J. Maier purchased 1,000 shares of the firm’s stock in a transaction that occurred on Friday, October 26th. The stock was acquired at an average price of $102.68 per share, for a total transaction of $102,680.00. Following the transaction, the director now directly owns 7,122 shares of the company’s stock, valued at approximately $731,286.96. The acquisition was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this hyperlink. Company insiders own 0.70% of the company’s stock.
Several large investors have recently added to or reduced their stakes in KSU. Cornerstone Wealth Management LLC boosted its position in shares of Kansas City Southern by 326.0% in the 3rd quarter. Cornerstone Wealth Management LLC now owns 564,442 shares of the transportation company’s stock valued at $5,419,000 after purchasing an additional 431,931 shares during the period. Strs Ohio boosted its position in 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 acquiring an additional 365,625 shares during the period. Renaissance Technologies LLC boosted its position in 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 acquiring an additional 327,700 shares during the period. FMR LLC boosted its position in Kansas City Southern by 275.4% during the 3rd quarter. FMR LLC now owns 399,447 shares of the transportation company’s stock worth $45,250,000 after acquiring an additional 293,045 shares during the period. Finally, Bank of America Corp DE boosted its position in 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 acquiring an additional 289,457 shares during the period. Institutional investors and hedge funds own 87.26% of the company’s stock.
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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