Nomura Securities Starts Genesee & Wyoming (GWR) at Neutral

Nomura Securities initiates coverage on Genesee & Wyoming (NYSE: GWR) with a Neutral rating and a price target of $101.00.

Analyst Matt Troy commented, "The only publicly traded portfolio company of short-line railroads, GWR is helmed by a solid management team with an impressive track record of successful M&A, having closed 20 deals in the last 10 years, all of which were executed cleanly. GWR offers investors exposure to the same positive secular trends of the larger Class I rails (pricing power, growth in crude by rail etc), bolstered by the call optionality of accretive M&A and exposure to the faster growing international market. To this latter point, we view GWR as a derivative play on growing natural resource consumption in China and across Asia, as 25% of total operating income is derived from its commodity-centric Australian network. Yet with depressed international commodity prices pressuring exports and longer-term mining projects in Australia, and the likelihood that GWR’s larger size will make it harder to identify meaningfully accretive acquisitions going forward, we believe multiples will compress from recent peaks and see shares range-bound into early 2015."

For an analyst ratings summary and ratings history on Genesee & Wyoming click here. For more ratings news on Genesee & Wyoming click here.

Shares of Genesee & Wyoming closed at $88.63 yesterday.

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