(The Associated Press circulated the following on December 17.)
NEW YORK — Shares of rail operators climbed Wednesday, with Kansas City Southern surging more than 17 percent after UBS raised it to “Buy” from “Neutral.”
UBS analyst Rick Paterson said in a note to investors that Kansas City Southern looks attractive now after dropping from a high of $55 in July. He is more optimistic about the company after it refinanced a $200 million note. At the same time, Paterson lowered his 2009 earnings estimate for Kansas City Southern — to $1.77 per share from $2.33 — because of the weak economy.
In midday trading, Kansas City Southern rose $2.91, or 17.3 percent, to $19.75.
Stifel Nicolaus & Co. analyst John G. Larkin cut earnings estimates for Canadian National, Canadian Pacific, Norfolk Southern and Union Pacific, but kept “Buy” ratings on all four — saying the shares are priced right.
“By the end of 2009, we believe that the rails will be on their way to a volume recovery as we expect fiscal and monetary policy stimulus to generate some positive economic traction by then,” Larkin said in a note to investors.
Canadian Pacific shares rose 12 cents to $35.18. Canadian National added $1.55, or 4.3 percent, at $38.06. Norfolk Southern gained $1.83, or 4 percent, at $48.15. Union Pacific rose $1.82, or 3.9 percent, to $48.72. Burlington Northern Santa Fe added $1.43 at $76.84, and CSX gained $1.36, or 4 percent, at $35.31.