Zacks Investment Research upgraded shares of Kansas City Southern (NYSE:KSU) from a hold rating to a buy rating in a research note issued to investors on Tuesday. They currently have $123.00 price target on the transportation company’s stock.
According to Zacks, “Shares of Kansas City Southern have outperformed the industry it belongs to in a year’s time. Revenue growth across most of the company’s key segments is encouraging. Improvement in operating ratio is also a positive for the company. Furthermore, we are bullish on the company's efforts to reward shareholders through dividend payments and buybacks. In line with this objective, the company hiked its quarterly dividend in excess of 9%, last year. Its board cleared a new share repurchase program worth $800 million too. However, declining volumes at the Agriculture & Minerals units remain concerning. Further, adding to its woes are high operating expenses mainly due to the rise in fuel costs.”
Several other equities research analysts have also recently issued reports on the stock. Goldman Sachs Group started coverage on shares of Kansas City Southern in a research note on Monday, November 13th. They set a neutral rating and a $109.00 target price on the stock. BMO Capital Markets reaffirmed a hold rating and set a $109.00 target price on shares of Kansas City Southern in a research note on Friday, November 24th. Six equities research analysts have rated the stock with a hold rating, ten have assigned a buy rating and one has given a strong buy rating to the company’s stock. The company currently has an average rating of Buy and a consensus target price of $115.33.
Kansas City Southern (NYSE:KSU) last announced its earnings results on Friday, January 19th. The transportation company reported $1.38 earnings per share (EPS) for the quarter, topping the consensus estimate of $1.36 by $0.02. Kansas City Southern had a net margin of 37.24% and a return on equity of 12.07%. The company had revenue of $660.40 million for the quarter, compared to analysts’ expectations of $658.33 million. During the same quarter in the previous year, the company posted $1.21 EPS. The firm’s quarterly revenue was up 10.3% on a year-over-year basis. sell-side analysts forecast that Kansas City Southern will post 6.24 earnings per share for the current year.
The business also recently declared a quarterly dividend, which will be paid on Wednesday, April 4th. Stockholders of record on Monday, March 12th will be issued a dividend of $0.36 per share. The ex-dividend date is Friday, March 9th. This represents a $1.44 annualized dividend and a dividend yield of 1.36%. Kansas City Southern’s dividend payout ratio is presently 15.64%.
In related news, Director Henry J. Maier purchased 1,000 shares of Kansas City Southern stock in a transaction dated Monday, February 12th. The shares were acquired at an average price of $104.35 per share, for a total transaction of $104,350.00. Following the acquisition, the director now directly owns 5,159 shares in the company, valued at $538,341.65. The purchase was disclosed in a filing with the SEC, which is available through this link. Also, COO Jeffrey M. Songer sold 3,000 shares of the business’s stock in a transaction dated Thursday, December 7th. The shares were sold at an average price of $111.80, for a total transaction of $335,400.00. The disclosure for this sale can be found here. 0.95% of the stock is owned by insiders.
Institutional investors and hedge funds have recently modified their holdings of the stock. Janus Henderson Group PLC raised its holdings in Kansas City Southern by 64.7% in the 3rd quarter. Janus Henderson Group PLC now owns 452,260 shares of the transportation company’s stock valued at $49,151,000 after buying an additional 177,706 shares during the period. Schwab Charles Investment Management Inc. raised its holdings in Kansas City Southern by 2.7% in the 3rd quarter. Schwab Charles Investment Management Inc. now owns 365,557 shares of the transportation company’s stock valued at $39,729,000 after buying an additional 9,585 shares during the period. Meag Munich Ergo Kapitalanlagegesellschaft MBH purchased a new stake in Kansas City Southern in the 3rd quarter valued at about $8,140,000. Impala Asset Management LLC raised its holdings in Kansas City Southern by 4,730.9% in the 3rd quarter. Impala Asset Management LLC now owns 458,353 shares of the transportation company’s stock valued at $49,814,000 after buying an additional 448,865 shares during the period. Finally, Macquarie Group Ltd. raised its holdings in Kansas City Southern by 22.0% in the 3rd quarter. Macquarie Group Ltd. now owns 13,300 shares of the transportation company’s stock valued at $1,446,000 after buying an additional 2,400 shares during the period. Hedge funds and other institutional investors own 83.75% of the company’s stock.
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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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