UPDATE: Bank of America Reiterates Buy Rating, Raises PT on Kansas City Southern Following Management Meetings

In a report published Monday, Bank of America reiterated its Buy rating on Kansas City Southern KSU, and raised its price target from $102.00 to $113.00. Bank of America noted, “Last Thursday, we hosted meetings with Kansas City Southern in Chicago. In our view, KCS remains one of the best long-term growth stories in the transport sector. Aside from the long-term structural growth in Mexico, the company has a few key growth pillars in 2H13-2014, including (1) 4 new auto plants that are scheduled to open in Mexico over the next 2 years (adding to its 9 in service), (2) moving Bakken and Canadian oil sands crude, (3) secular growth in Intermodal, (4) the addition of 2 major grain shippers in the back half of 2013, and (5) a potential debt upgrade. Headwinds include one of KCS' coal customers shutting 2 boilers in December (although it is now comping against when the plant was shut between Feb-Jun 2012). Additionally, through 1H13 it will feel residual impacts from the drought on grain. While current multiples are expanding toward peak levels, and KSU remains a favored pick, we recognize the 23% uptick in the shares year-to-date is beginning to price in 2014 growth.” Kansas City Southern closed on Friday at $102.02.