Shares of North American rail companies up Sept. 13 after one analyst boosts rating for Kansas City Southern on expectations of revenue growth, another analyst reports of limited impact from Hurricane Irene on regional rail traffic

Liling Tan

NEW YORK , September 13, 2011 (Associated Press) – Shares of railroad companies rose Tuesday, after an analyst boosted his rating for Kansas City Southern, citing expectations of revenue growth at the company.

Citi's Christian Wetherbee boosted his rating for the freight rail company to "Buy" from "Hold," saying that while the Kanas City, Mo., company's stock price has fallen 20 percent recently, its finances are still strong.

"Kansas City Southern is one of the best growth stories in our coverage, as we expect Mexico and cross border operations to drive double digit revenue growth while cost advantages provide the potential for best in class margins," Wetherbee wrote in a note to investors.

In midday trading, Kansas City Southern shares rose $2.47, or 5 percent, to $52.18 after peaking at $52.79 earlier in the day. Over the past 52 weeks, the company's shares have traded between $36.17 and $62.78.

Also on Tuesday, Sterne Agee Analyst Jeff Kauffman said it doesn't appear that Hurricane Irene had a meaningful impact on North American rail traffic. Traffic was flat during the week of the hurricane, including a 1 percent decrease in the U.S. and a 4 percent drop in Canada.

The week's results were roughly in line with those of the four weeks before, which ranged from a decrease of 1 percent to an increase of 2 percent, Kauffman said.

Among other railroad companies, shares of Union Pacific Corp. rose $2.31, or 2.7 percent, to $86.60; CSX Corp. added 41 cents, or 2.1 percent, to $19.92; Norfolk Southern increased $1.48, or 2.3 percent, to $66.24; Genesee & Wyoming Inc. rose $1.26, or 2.7 percent, to $48.17; and Canadian Pacific Railway Ltd. added $1.16, or 2.3 percent, to $52.18.

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