Kansas City (KSU) Falls As UBS Says Takeover Speculation "Unhealthy", Cuts to Sell

Shares of rail company Kansas City Southern (NYSE: KSU) are down 4% today after analysts at UBS downgraded the stock, saying the 42% rally in the stock since Berkshire announced its Burlington Northern (NYSE: BNI) acquisition in early November suggests "there's an unhealthy degree of takeover speculation in the name."

The firm's rating went from Neutral to Sell and the price target went from $28 to $30.

UBS analyst Rick Paterson said there are two reason to own KSU, a buyout or better than expected financial performance, and they have no conviction for either. He said, "While neither is impossible, we would argue they're improbable, at least over the course of 2010."

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