Burlington Northern Santa Fe "outperform," target price raised

04/26/07 - Credit Suisse

NEW YORK, April 26 (newratings.com) - Analyst JH Seidl of Credit Suisse maintains his "outperform" rating on Burlington Northern Santa Fe (BNI), while reducing his estimates for the company. The 12-month target price has been raised from $84 to $100.

In a research note published yesterday, the analyst mentions that the company has reported its 1Q07 EPS from continuing operations ahead of the estimates and in-line with the consensus due to a better-than-expected performance by the railroad unit, driven by cost controls. Burlington Northern Santa’s outlook seems bleak due to the ongoing market weakness, which is likely to continue during 2H07, the analyst says. The upward revision in the target price reflects expansion in valuation multiples of the rail sector, Credit Suisse adds. The EPS estimates for 2007 and 2008 have been reduced by $5.80 to $5.50 and from $6 50 to $6.45, respectively.