UPDATE: Seaport Global Securities Starts Kansas City Southern (KSU) at Accumulate
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(Updated - October 19, 2016 9:34 AM EDT)
Seaport Global Securities initiated coverage on Kansas City Southern (NYSE: KSU) with an Accumulate rating and a price target of $104. Analyst Mark A. Levin thinks concerns create opportunity.
"Our target assumes the shares trade to 20x our 2017 EPS estimate of $5.20. With volumes likely to improve in Q4 and the first half of 2017 (absent a recession), we expect growth investors will eventually return to KSU. What's notable is that the relative premium at which KSU trades to other Class I rails has compressed meaningfully as investors have gravitated to names with cheaper multiples and/or more potential upside from coal. We think this creates an opportunity to buy the best growth story in the space at a reasonable price," said Levin.
Shares of Kansas City Southern closed at $92.58 yesterday.
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