Will Kansas City Southern (KSU) Surpass The Expectations That Analysts Have Set?

Kansas City Southern (KSU) shares saw a recent bid of $103.83 and 1.59M shares have exchanged hands in the recent trading session, yielding a 4.26% gain over the past week. The stock price increased 1.93% or $-1.97 versus $101.86 at the end of the prior session. This change led market cap to move at $11.02B, putting the price 1.58% below the 52-week high and 31.35% above the 52-week low. The company’s stock has a normal trading capacity of 1.29M shares while the relative volume is 1.22.

To stay one step ahead we extended our research by comparing different price targets. The stock notched a 12-month high of $98.69 while $116.00 target is by far the most aggressive out of analysts who are currently evaluating the company, $17.31 higher than the next highest 52-week price estimate. The lowest 12-month price target for the shares is $88.00, which would be decrease of about -15% of its current value. The mean target of $97.50 should be compared with the price when the stock was languishing around $79.05 a share. And it remains to be seen which target price KSU can achieve without sacrificing much as the company is holding a 18.89% gain for the past twelve months.

By historical standards, Kansas City Southern remains a cheap stock. The company’s current price-earnings ratio amounts to 21.55 times earnings, below the average P/E ratio of 23.83 times earnings. For now, Kansas City Southern is the toast of Wall Street as its ABR stands at 2.50 with 5 out of 20 analysts rating the stock a buy. Over the short term, some market observers may have noticed that Kansas City Southern has a 1.70% short float with 15 days to cover. It becomes significant when you consider how many shares are shorted versus the average daily volume, means how many days to cover those short shares at that volume. Kansas City Southern has far performed well this year, with the share price up 22.37% since January. Over the past 2 quarters, the stock is up 22.57%, compared with a gain of nearly 23.42% for 3 months and about 15.37% for the past 30 days.

Last time, the company shocked Wall Street by reporting EPS of $1.17, smashing the consensus of $1.16 per share. Revenue for the quarter also killed consensus, coming in at $609.5M, compared to the consensus of 601.28M. Nonetheless, from here on out, earnings per share forecasts for the current quarter are $1.25. The company is expected to report EPS as high as $1.33 and as low as $1.21 per share. Similarly, full-year EPS forecasts have ranged between $4.96 and $5.25. The mean EPS estimate is $5.10. On the other side, sales forecasts for the current quarter are $617.61M. The stock is expected to report revenue as high as $653.5M and as low as $602.6M per share. Similarly, full-year sales forecasts have ranged between $2.49B and $2.58B. The mean revenue estimate is $2.51B.

Over the last 5 years, Kansas City Southern has averaged a 8.10% YoY EPS growth rate and a 2.20% revenue growth rate. Analysts are expecting EPS growth rates to be at 0.90% this quarter and EPS estimate for next year reflect 12.09% growth rate.

Sell-side analysts also have something to say about this company. Credit Suisse raised its rating on Kansas City Southern to Outperform on 16/06/2017 in a reversal from its prior Neutral rating. Cowen analysts stated on 24/04/2017 that they maintained their Market Perform rating. Wells Fargo analysts stated on 14/03/2017 that they launched coverage on this stock with Market Perform rating. Seaport Global Securities had a markedly different take on 23/01/2017, proposing that Kansas City Southern is now considered Neutral versus prior Accumulate rating.

Will Kansas City Southern (KSU) Surpass The Expectations That Analysts Have Set? was last modified: June 19th, 2017 by Caleb Gerald
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