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Kirby (KEX) Shares Decline 14.5% in 6 Months: Here's Why

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Shares of Kirby Corporation (KEX - Free Report) have shed 14.5% of value in the past six months compared with its industry’s 15.7% depreciation.

Lets delve deep to unearth the reasons for the price plunge of Kirby, which is currently carrying a Zacks Rank #5 (Strong Sell).

Kirby is being hurt by the lackluster performance of its distribution and services unit. The segment is responsible for selling replacement parts and focuses on oil and gas, and the commercial and industrial markets. The division also provides service mechanics to overhaul and repair engines, transmissions, reduction gears and related oilfield services equipment.

The unit's below-par performance is due to softness in the oil and gas market. Segmental revenues plunged 46.1% in the first half of 2020.

Also, coronavirus concerns worsened the situation resulting in dwindling demand for Kirby's products and services. Matters got more complicated when one of Kirby’s large oil and gas customers went bankrupt. Consequently, the company’s June-quarter earnings were hit by roughly 4 cents per share.

The pandemic-led disruptions further induced weaknesses in the inland and coastal markets. Consequently, demand for many products transported by Kirby is on the wane. Due to ramped-down customer activity levels, barge requirements in both inland and coastal markets have declined.

Southward Earnings Estimates: The Zacks Consensus Estimate for current-quarter earnings has been revised 39.3% downward over the past 60 days. For 2020, the consensus mark for earnings has moved 9.3% south in the same time frame. Such unfavorable estimate revisions reflect brokers’ lack of enthusiasm the stock.

Given the wealth of information at their disposal, it is in the best interest of investors to be guided by the brokers' advice and the direction of their estimate revisions. This is because the movement of estimates serves as an important pointer when it comes to ascertaining the stock price.

Stocks to Consider

Investors interested in the Zacks Transportation sector may consider Knight-Swift Transportation Holdings (KNX - Free Report) , Canadian Pacific Railway Limited (CP - Free Report) and Werner Enterprises (WERN - Free Report) . Knight-Swift sports a Zacks Rank #1(Strong Buy) while Canadian Pacific and Werner carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of Knight-Swift, Canadian Pacific and Werner have rallied 39.6%, 27.2% and 39.6%, respectively, in the past three months.

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