(The following appeared at TradingMarkets.com on April 4.)
BOSTON — Kansas City Southern Friday was downgraded to neutral from buy at UBS, which said the stock has traded at or above its $40 price target during the past week.
Analyst Randy Cousins said Kansas City Southern is “an exceptional story” longer-term. “Asset upgrades, new operating systems and an integrated approach to the management of the Kansas City Southern’s U.S. Rail and Kansas City Southern Mexico systems have the potential to drive superior top-line growth while at the same time reduce the operating ratio,” he said in a client note.
However, Cousins is lowering his rating on the stock because of share price appreciation.
He left his 2008 and 2009 earnings estimates unchanged at $2.04 a share and $2.60 a share, respectively. Analysts polled by Thomson Financial, on average, forecast 2008 earnings of $1.97 a share and 2009 earnings of $2.53 a share.
Shares of Kansas City Southern closed Thursday at $41.05.