(The Associated Press circulated the following on September 4.)
NEW YORK — Railroad stocks finished mostly higher in trading Tuesday, after a UBS analyst upgraded shares of Kansas City Southern and a tentative agreement was reached between Canadian Pacific and a worker’s union.
Analyst Rick Paterson raised his rating on Kansas City Southern shares to “Buy” from “Neutral” and raised his price target to $41 from $40, saying that the stock is a buying opportunity for investors. The stock had fallen 29 percent since hitting an all-time high in June.
Paterson said that although volumes remain negative and efficiency of the rail remains flat compared to 2006, the long-term prospects for the stock remain “compelling.”
The analyst also views Kansas City Southern as a potential acquisition target.
Also Tuesday, Canadian Pacific Railway and the Teamsters Canada Rail Conference reached a tentative five-year contract settlement. The union represents 4,500 locomotive engineers and conductors.
Details of the tentative agreement will be released following ratification of the agreement by union members, Canadian Pacific said.
Kansas City Southern rose $1.60, or 5.3 percent, to $32.99.
Union Pacific Corp. added 98 cents to $112.55.
Burlington Northern Santa Fe Corp. rose $1.75, or 2.2 percent, to $82.90.
Norfolk Southern Corp. gained 33 cents to $51.54.
CSX Corp. added $1.02, or 2.5 percent, to $42.02.
Canadian Pacific Railway Corp. slipped 55 cents to $69.93.