(The following report appeared at NewRatings.com on September 4.)
NEW YORK — Analysts at UBS upgrade Kansas City Southern (KSU.NYS) from “neutral” to “buy,” while reducing their estimates for the company. The 12-month target price has been reduced from $41 to $40.
In a research note published this morning, the analysts mention that the upgrade in the rating is based on the recent significant decline in Kansas City Southern’s share price and continued positive view on the company’s financial performance over the long term. Although the company is likely to be unable to attain its revenue growth target of 6% and its operating ratio target of 80% for 2007, its long-term prospects are compelling, the analysts say. The EPS estimates for 2007 and 2008 have been reduced from $1.41 to $1.38 and from $1.86 to $1.81, respectively.