Bank of America Raises Estimates On Railroad Stocks - Canadian Pacific Kansas (NYSE:CP), Canadian National Railway (NYSE:CNI)

In a note released Wednesday, Bank of America analyst, Ken Hoexter raised price objectives across the board on the railroad sector and provided his revised EPS estimates. Hoexter noted that the group is trading at an average of 15.8x his 2015 EPS estimates, which is at the high end of its historical average. on this topic Hoexter wrote, "we believe the rails should trade above their historical trading ranges given sustainable double-digit earnings growth, improving return on invested capital levels, and the ability to price above inflation." Despite his optimism, Hoexter warned that the stocks might "take a slight breather" in the summer months.

Estimate Revisions

Canadian National Railway Company CNI - Price objective from $62 to $67; Q214 EPS raised from $0.92 to $1.02, FY14 from $3.47 to $3.60, FY15 from $3.88 to $4.00.
Canadian Pacific Railway Limited CP - PO from $180 to $202; Q214 from $2.10 to $2.04, FY14 unchanged at $8.50, FY15 from $10.50 to $10.65.
CSX Corp. CSX - PO from $33 to $36; Q214 from $0.51 to $0.53, FY14 from $1.85 to $1.86, FY15 from $2.13 to $2.15.
Norfolk Southern Corporation NSC - PO from $113 to $118; Q214 from $1.69 to $1.74, FY!$ from $6.30 to $6.40.
Union Pacific Corporation UNP - PO from $102.50 to $113; Q214 from $1.38 to $1.41, FY14 from $5.45 to $5.50, F15 from $6.13 to $6.25.
Kansas City Southern KSU - PO from $113 to $123; Q214 from $1.21 to $1.18, FY14 unchanged at $4.70, FY15 from $5.50 to $5.45.
Genesee & Wyoming Inc. GWR - Q214 unchanged at $1.11, FY14 unchanged at $4.25, FY15 unchanged at $5.30

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