Despite Potential Price Tag, Kansas City Southern A Tempting Target

Photo courtesy of Creative Commons
Photo courtesy of Creative Commons

With rapidly expanding operations in Mexico and booming oil production in the U.S. projected to help sales growth for Kansas City Southern outpace all other major North American railroads through 2016, analysts say the Kansas City-based railroad makes an alluring acquisition target.

Different analysts name Union Pacific, Canadian National Railway, Canadian Pacific Railway and BNSF Railway as potential buyers, although antitrust hurdles could stand in the way of the purchase for some suitors.

Although Kansas City Southern trades at 34 times its earnings from the past year — the highest rate among its peer group — analysts indicate buyers may be willing to overlook the price tag because of the company’s potential for growth.

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