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Here's Why Investors Should Retain Kirby Stock Now
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Key Takeaways
KEX saw Q1 2025 revenues edge up 0.15% as tight capacity boosted barge rates and utilization.
A $97.3M vessel acquisition expands capacity amid strong demand, especially in specialty markets.
Operational delays and rising costs from weather, labor shortages and inflation hurt margins.
Kirby Corporation (KEX - Free Report) is thriving with strong demand, which is boosting its prospects. Shareholder-friendly initiatives and robust liquidity are encouraging. However, KEX is grappling with economic uncertainties and supply-chain disruptions.
Factors Favoring KEX
Robust demand and favorable market conditions drove strong first-quarter 2025 results for Kirby. In marine transportation, Kirby capitalized on high barge utilization and limited capacity to raise spot and contract prices, driving a 0.15% increase in revenues. The company’s revenues are forecasted to grow in the mid to high single-digit range for the full year, with operating margins expected to improve by 200-300 basis points over the first-quarter levels.
Kirby’s $97.3 million acquisition of 14 barges, including four specialty units and four high-horsepower boats in the first quarter of 2025, reflects a strategic move to expand capacity amid tight market conditions. The addition enhances operational flexibility and positions the company to capitalize on strong demand, particularly in higher-margin specialty markets.
Kirby has been consistently rewarding its shareholders through share buybacks. During 2024, KEX purchased 1.6 million shares for $174.6 million. From the beginning of 2025 till Feb. 17, 2025, the company purchased an additional 0.2 million shares for $26.0 million at an average price of $107.56 per share. As of Feb. 17, 2025, Kirby had almost 2.6 million shares available under its existing purchase authorizations. In the first quarter of 2025, KEX repurchased 1.3 million shares for $124.7 million. Such shareholder-friendly initiatives should boost investor confidence and positively impact the bottom line.
Solid liquidity is another tailwind for the company, as KEX ended the first quarter of 2025 with a current ratio (a measure of liquidity) of 1.58. A current ratio of greater than one is always recommended, as it indicates that the company has sufficient cash to meet its short-term obligations.
Owing to such tailwinds, KEX shares have risen 4.7% year to date compared to the Transportation - Shipping industry’s fall of 0.1%
Image Source: Zacks Investment Research
KEX: Key Risks to Watch
Kirby is facing significant challenges arising from several external factors that are impacting the company’s operations and top-line growth. Severe winter weather, high winds, fog along the Gulf Coast, and lock delays on the Mississippi River led to a 50% sequential and 15% year-over-year increase in delay days in inland marine, disrupting transit times and reducing operational efficiency.
In distribution and services, supply-chain delays pushed out project deliveries in the power generation business, contributing to a 23% revenue decline despite strong order intake. Moreover, weak activity in the conventional oil and gas market drove an 18% drop in related revenues.
Further compounding operational challenges were inflationary pressures and acute labor shortages, particularly in the marine segment. Rising labor and equipment costs, especially due to a shortage of qualified mariners, drove up operational expenses and constrained potential margin expansion.
CPA has an expected earnings growth rate of 14.3% for the current year. The company has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average beat of 5.5%. Shares of CPA have risen 18% year to date.
RYAAY currently carries a Zacks Rank of #2 (Buy).
RYAAY has an expected earnings growth rate of 30.5% for the current year. The company has a mixed earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in two of the trailing four quarters and missed twice, delivering an average beat of 46.6%. Shares of RYAAY have rallied 26.6% year to date.
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Here's Why Investors Should Retain Kirby Stock Now
Key Takeaways
Kirby Corporation (KEX - Free Report) is thriving with strong demand, which is boosting its prospects. Shareholder-friendly initiatives and robust liquidity are encouraging. However, KEX is grappling with economic uncertainties and supply-chain disruptions.
Factors Favoring KEX
Robust demand and favorable market conditions drove strong first-quarter 2025 results for Kirby. In marine transportation, Kirby capitalized on high barge utilization and limited capacity to raise spot and contract prices, driving a 0.15% increase in revenues. The company’s revenues are forecasted to grow in the mid to high single-digit range for the full year, with operating margins expected to improve by 200-300 basis points over the first-quarter levels.
Kirby’s $97.3 million acquisition of 14 barges, including four specialty units and four high-horsepower boats in the first quarter of 2025, reflects a strategic move to expand capacity amid tight market conditions. The addition enhances operational flexibility and positions the company to capitalize on strong demand, particularly in higher-margin specialty markets.
Kirby has been consistently rewarding its shareholders through share buybacks. During 2024, KEX purchased 1.6 million shares for $174.6 million. From the beginning of 2025 till Feb. 17, 2025, the company purchased an additional 0.2 million shares for $26.0 million at an average price of $107.56 per share. As of Feb. 17, 2025, Kirby had almost 2.6 million shares available under its existing purchase authorizations. In the first quarter of 2025, KEX repurchased 1.3 million shares for $124.7 million. Such shareholder-friendly initiatives should boost investor confidence and positively impact the bottom line.
Solid liquidity is another tailwind for the company, as KEX ended the first quarter of 2025 with a current ratio (a measure of liquidity) of 1.58. A current ratio of greater than one is always recommended, as it indicates that the company has sufficient cash to meet its short-term obligations.
Owing to such tailwinds, KEX shares have risen 4.7% year to date compared to the Transportation - Shipping industry’s fall of 0.1%
Image Source: Zacks Investment Research
KEX: Key Risks to Watch
Kirby is facing significant challenges arising from several external factors that are impacting the company’s operations and top-line growth. Severe winter weather, high winds, fog along the Gulf Coast, and lock delays on the Mississippi River led to a 50% sequential and 15% year-over-year increase in delay days in inland marine, disrupting transit times and reducing operational efficiency.
In distribution and services, supply-chain delays pushed out project deliveries in the power generation business, contributing to a 23% revenue decline despite strong order intake. Moreover, weak activity in the conventional oil and gas market drove an 18% drop in related revenues.
Further compounding operational challenges were inflationary pressures and acute labor shortages, particularly in the marine segment. Rising labor and equipment costs, especially due to a shortage of qualified mariners, drove up operational expenses and constrained potential margin expansion.
KEX’s Zacks Rank
KEX currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Investors interested in the Transportation sector may consider Copa Holdings (CPA - Free Report) and Ryanair (RYAAY - Free Report) .
CPA currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
CPA has an expected earnings growth rate of 14.3% for the current year. The company has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average beat of 5.5%. Shares of CPA have risen 18% year to date.
RYAAY currently carries a Zacks Rank of #2 (Buy).
RYAAY has an expected earnings growth rate of 30.5% for the current year. The company has a mixed earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in two of the trailing four quarters and missed twice, delivering an average beat of 46.6%. Shares of RYAAY have rallied 26.6% year to date.