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Kirby Corp (KEX) Stock Down 5.7% Year to Date: Here's Why

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Kirby Corporation (KEX - Free Report) shares have lost 5.7% so far this year against the industry’s 67.3% rise in the same time frame.

Zacks Investment ResearchImage Source: Zacks Investment Research

Reasons for Downside

Kirby’s cash position is dismal. The carrier exited second-quarter 2021 with cash and cash equivalents of $53.1 million, whereas its long-term debt (including current portion) was $1,275.7 million. This implies that the company does not have enough cash to meet its total debt burden.

Low spot market rates and average barge utilization are dampening the marine transportation segment’s performance. Revenues in the unit declined 12.7% year over year in the second quarter. Revenues in the inland market (contributing 76% to the segment’s revenues) also fell 16% from second-quarter 2020 levels due to the impact of lower pricing and barge utilization.

Persistent weakness in the coastal market (part of the marine transportation unit) is a concern.  The coastal market recorded negative operating margin in the mid-single digits during the June-end quarter. Kirby expects the coastal market to persistently encounter weak market conditions for the rest of 2021.

Unfavorable Estimate Revisions & Lackluster Momentum Score

Driven by the above headwinds, the Zacks Consensus Estimate for current-year earnings has dropped 60% to 74 cents per share. The company’s Momentum Score of C further highlights its short-term unattractiveness.

Zacks Rank & Stocks to Consider

Kirby currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the Zacks Transportation sector are Schneider National, Inc. (SNDR - Free Report) , Werner Enterprises, Inc. (WERN - Free Report) and Landstar System, Inc. (LSTR - Free Report) . All the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1(Strong Buy) Rank stocks here.

Long-term expected earnings per share (three to five years) growth rate for Schneider National, Werner and Landstar is pegged at 17.9%, 13.1% and 12%, respectively.