Kansas City Southern (NYSE:KSU) was downgraded by Zacks Investment Research from a “hold” rating to a “sell” rating in a research report issued to clients and investors on Monday.

According to Zacks, “Shares of Kansas City Southern have underperformed its industry in a year's time. High operating expenses are a cause for concern. Increase in fuel costs have contributed to the rise in toatal expenses. High operating expenses have led to the deterioration in operating ratio. Declining revenues at the Energy segment are also worrisome and has the potential to hinder top-line growth in turn. The negativity revolving around the stock is evident from the Zacks Consensus Estimate for current-quarter earnings being revised 1.2% downward in 60 days. Detailed results will be available on Oct 19. However, we are impressed by the company's efforts to reward shareholders through dividend payments and buybacks.”

Other research analysts also recently issued reports about the stock. Morgan Stanley increased their target price on shares of Kansas City Southern from $106.00 to $108.00 and gave the company a “$111.08” rating in a research report on Monday, July 23rd. Credit Suisse Group increased their target price on shares of Kansas City Southern from $125.00 to $126.00 and gave the company a “$111.08” rating in a research report on Monday, July 23rd. Loop Capital set a $127.00 target price on shares of Kansas City Southern and gave the company a “buy” rating in a research report on Tuesday, July 10th. Stifel Nicolaus reaffirmed a “buy” rating and issued a $130.00 target price on shares of Kansas City Southern in a research report on Saturday, June 2nd. Finally, Deutsche Bank started coverage on shares of Kansas City Southern in a research report on Tuesday, September 4th. They issued a “hold” rating and a $119.00 target price on the stock. One analyst has rated the stock with a sell rating, four have given a hold rating, seven have given a buy rating and one has given a strong buy rating to the company. Kansas City Southern presently has an average rating of “Buy” and a consensus price target of $122.43.

Shares of NYSE:KSU opened at $114.89 on Monday. Kansas City Southern has a 52 week low of $99.47 and a 52 week high of $120.34. The company has a current ratio of 1.20, a quick ratio of 0.85 and a debt-to-equity ratio of 0.54. The company has a market capitalization of $11.96 billion, a price-to-earnings ratio of 21.98, a PEG ratio of 1.48 and a beta of 0.83.

Kansas City Southern (NYSE:KSU) last announced its quarterly earnings data on Friday, July 20th. The transportation company reported $1.54 EPS for the quarter, beating the Zacks’ consensus estimate of $1.52 by $0.02. The company had revenue of $682.40 million for the quarter, compared to the consensus estimate of $686.12 million. Kansas City Southern had a net margin of 36.91% and a return on equity of 12.01%. The company’s quarterly revenue was up 4.0% compared to the same quarter last year. During the same period in the prior year, the firm posted $1.33 EPS. research analysts forecast that Kansas City Southern will post 6.09 earnings per share for the current year.

In related news, VP Suzanne M. Grafton sold 729 shares of the stock in a transaction on Wednesday, August 29th. The shares were sold at an average price of $119.78, for a total transaction of $87,319.62. Following the completion of the sale, the vice president now owns 10,580 shares in the company, valued at approximately $1,267,272.40. The sale was disclosed in a document filed with the SEC, which can be accessed through the SEC website. Also, Director Lu M. Cordova sold 1,000 shares of the stock in a transaction on Tuesday, August 28th. The stock was sold at an average price of $118.93, for a total transaction of $118,930.00. The disclosure for this sale can be found here. In the last quarter, insiders have sold 7,171 shares of company stock valued at $841,712. 0.70% of the stock is owned by company insiders.

A number of large investors have recently modified their holdings of KSU. Assetmark Inc. acquired a new stake in shares of Kansas City Southern in the 2nd quarter worth $101,000. FNY Investment Advisers LLC acquired a new stake in shares of Kansas City Southern in the 2nd quarter worth $105,000. Point72 Hong Kong Ltd lifted its stake in shares of Kansas City Southern by 63.5% in the 2nd quarter. Point72 Hong Kong Ltd now owns 1,439 shares of the transportation company’s stock worth $152,000 after acquiring an additional 559 shares during the period. Summit Trail Advisors LLC lifted its stake in shares of Kansas City Southern by 9,893.5% in the 1st quarter. Summit Trail Advisors LLC now owns 162,495 shares of the transportation company’s stock worth $162,000 after acquiring an additional 160,869 shares during the period. Finally, Gideon Capital Advisors Inc. acquired a new stake in shares of Kansas City Southern in the 2nd quarter worth $204,000. Hedge funds and other institutional investors own 87.58% of the company’s stock.

Kansas City Southern Company Profile

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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