Kansas City Southern (KSU): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report


Kansas City Southern reported third-quarter fiscal 2015 financial results wherein both the top and the bottom line surpassed the Zacks Consensus Estimate. The company boasts an efficient network and high service standards which offer long-term opportunities to leverage the strength in the U.S. and global economies. Robust U.S. economic growth, Mexico's growing automotive market and an improving operating ratio may continue act as tailwinds for the company. However, we expect high capital requirements, regulatory risk and intensifying competition from other railroad operators and carriers in other modes of freight transportation to mar its growth prospects. Moreover, low oil prices coupled with reduced electricity generation from coal will continue to affect the company's business. Considering these factors, we maintain a Neutral recommendation on the company.


Based in Kansas City, MO, Kansas City Southern (KSU) is a transportation holding company that has railroad investments in the U.S., Mexico and Panama. Its primary U.S. holding is The Kansas City Southern Railway Company (KCSR), serving central and south central U.S. Its international holdings include Kansas City Southern de Mexico, S.A. de C.V. (KCSM), serving northeastern and central Mexico and the port cities of L zaro C rdenas, Tampico and Veracruz, and a 50% interest in Panama Canal Railway Company (PCRC), providing ocean-to-ocean freight and passenger service along the Panama Canal. Founded in 1962, the company was formerly known as Kansas City Southern Industries Inc. and changed its name to Kansas City Southern in 2002.

Kansas City Southern through its various subsidiaries and alliances, provides rail transportation services over a network of more than 25,000 route miles across the U.S., Canada and Mexico. The company's coordinated rail network provides shippers with an effective alternative by giving direct access to Mexico, the south-east and south-west United States through less congested interchange hubs. Revenue is generated from haulage of chemicals and petroleum, paper and forest products, agricultural and mineral products, intermodal (road and rail) and automotive products, coal and others.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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