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 equities research analysts have also issued reports on KSU. Loop Capital upped their price target on Kansas City Southern to $140.00 and gave the company a buy rating in a research report on Tuesday, August 28th. Cowen raised Kansas City Southern from a market perform rating to an outperform rating and upped their price target for the company from $124.00 to $138.00 in a research report on Wednesday, August 29th. Raymond James upped their price target on Kansas City Southern from $128.00 to $133.00 and gave the company a strong-buy rating in a research report on Friday, August 31st. Deutsche Bank started coverage on Kansas City Southern in a research report on Tuesday, September 4th. They set a hold rating and a $119.00 price target on the stock. Finally, Bank of America dropped their price target on Kansas City Southern from $134.00 to $130.00 and set a buy rating on the stock in a research report on Monday, October 1st. Three equities research analysts have rated the stock with a hold rating, eight have given a buy rating and one has issued a strong buy rating to the company. The stock currently has an average rating of Buy and a consensus target price of $126.64.
Kansas City Southern (NYSE:KSU) last posted its quarterly earnings results on Friday, October 19th. The transportation company reported $1.57 earnings per share (EPS) for the quarter, meeting the Thomson Reuters’ consensus estimate of $1.57. The business had revenue of $699.00 million for the quarter, compared to analyst estimates of $708.19 million. Kansas City Southern had a return on equity of 11.98% and a net margin of 37.98%. The business’s revenue was up 6.5% compared to the same quarter last year. During the same period in the prior year, the company posted $1.35 EPS. Sell-side analysts expect that Kansas City Southern will post 5.99 earnings per share for the current year.
The business also recently announced a quarterly dividend, which will be paid on Wednesday, January 16th. Shareholders of record on Monday, December 31st will be given a $0.36 dividend. This represents a $1.44 annualized dividend and a yield of 1.47%. The ex-dividend date is Friday, December 28th. Kansas City Southern’s dividend payout ratio is presently 27.43%.
In related news, Director Henry J. Maier bought 1,000 shares of the company’s stock in a transaction on Friday, October 26th. The shares were purchased at an average cost of $102.68 per share, with a total value of $102,680.00. Following the completion of the transaction, the director now directly owns 7,122 shares of the company’s stock, valued at $731,286.96. The acquisition was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. 0.70% of the stock is owned by company insiders.
Hedge funds and other institutional investors have recently modified their holdings of the business. Aurora Investment Counsel acquired a new stake in Kansas City Southern in the third quarter worth $2,008,000. Verition Fund Management LLC acquired a new position in shares of Kansas City Southern during the second quarter valued at $1,307,000. Bank of America Corp DE increased its holdings in shares of Kansas City Southern by 32.3% during the second quarter. Bank of America Corp DE now owns 1,186,541 shares of the transportation company’s stock valued at $125,724,000 after purchasing an additional 289,457 shares during the period. OppenheimerFunds Inc. increased its holdings in shares of Kansas City Southern by 2.5% during the second quarter. OppenheimerFunds Inc. now owns 337,358 shares of the transportation company’s stock valued at $35,746,000 after purchasing an additional 8,166 shares during the period. Finally, WINTON GROUP Ltd increased its holdings in shares of Kansas City Southern by 1,582.9% during the second quarter. WINTON GROUP Ltd now owns 60,199 shares of the transportation company’s stock valued at $6,379,000 after purchasing an additional 56,622 shares during the period. 87.26% of the stock is currently owned by hedge funds and other institutional investors.
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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