👀 Copy Legendary Investors' Portfolios in One ClickCopy For Free

BofA remains bullish on Kirby stock, cites supportive inland fundamentals despite rate pressures

EditorEmilio Ghigini
Published 12/16/2024, 06:00 AM
KEX
-

On Monday, BofA Securities revised its price target for Kirby Corporation (NYSE:KEX), a prominent player in the marine transportation and diesel engine services sectors. The firm's analyst has reduced the price target to $142.00 from the previous $147.00, while still maintaining a Buy rating on the company's stock.

The stock, currently trading at $117.45, has demonstrated strong performance with a 51.88% return over the past year. InvestingPro analysis reveals the company maintains a healthy financial profile with a "GOOD" overall rating.

The adjustment comes in light of extended maintenance on Gulf Coast crackers, which has decreased Kirby's inland barge utilization to 90% from the previous 92%. This situation is expected to continue into 2025. As a result, the analyst has modified the spot rate target to remain constant at approximately $10,000 per day for a boat and two 30,000-barrel barges. With an EBITDA of $680.37 million and revenue growth of 7.94%, the company maintains strong operational metrics.

According to InvestingPro, there are 6 additional key insights available for subscribers, including valuable data on the company's growth prospects. This is a shift from earlier expectations that rates could rise to between $11,000 and $11,500 per day, despite some rates being locked in at these higher levels.

Despite the current spot rates remaining subdued, Kirby is actively renewing around 40% of its contract book in the fourth quarter. The company has also indicated expectations for upper-single-digit contract rate renewals. Although there is seasonal weakness, the analyst believes that the fundamentals of inland supply and demand continue to be supportive of the business.

The company's strong financial position is evidenced by its healthy current ratio of 1.67 and attractive PEG ratio of 0.38, suggesting reasonable valuation relative to growth. For detailed financial analysis and comprehensive valuation metrics, investors can access the full Pro Research Report available on InvestingPro.

Kirby has observed that spot rates are running approximately 10% higher than term rates, with term rates progressively aligning with spot rates. The fourth quarter's utilization rates were also likely influenced by the uncertainty surrounding the U.S. election period, according to the company.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.