Deutsche Bank Gives Update On Genesee & Wyoming Following Recent Earnings Report

Genesee & Wyoming GWR reported Q1 EPS of $0.52 which was below Deutsche Bank's estimate and consensus of $0.57. Q1 results were constrained by heavy Australian rains, GWR's Canadian operations, which were adversely impacted by severe winter weather and lower shipments of winter grain as well as the lag effect of the fuel surcharge mechanism. Despite Q1 downside, Deutsche Bank sees compelling long-term growth potential. Deutsche Bank lifts its TP to $70 and reiterate its Buy rating. Genesee & Wyoming announced three new projects to: ship iron ore from a new mine in Australia that is expected to generate A$50 million of annual revenue when it is fully operational; ship iron ore from a new mine in Canada near its existing operations in Labrador; and expand port services business to the Port of Antwerp. Deutsche Bank raises its 2011-12 EPS estimates to $2.70 and $3.34, respectively, up from $2.61 and $3.08 as it now sees faster carload growth and greater currency tailwinds. DB raises its TP to $70, which is based on a raised 21x P/E multiple on its new 2012 EPS estimate of $3.34. GWR closed Friday at $61.98