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Kirby (KEX) Loses 13% in a Year: What's Dragging It Down?
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Shares of Kirby Corporation (KEX - Free Report) have lost 13% against the industry's 16.1% decline in a year’s time. The disappointing performance was caused by weakness in the oil and gas market as well as ramped down activity in coal transportation business.
Let’s discuss the factors hurting the stock.
Dismal performance of the oil and gas market caused a 16% decline in the company’s distribution and services revenues in 2019. The headwind is anticipated to persist in 2020, which is likely to lower revenues at the distribution and services in the range of 12-17%.
Also, reduced activity in coal transportation business is likely to dent coastal revenues (part of the broader marine transportation segment’s revenues) in 2020. Consequently, coastal revenues are anticipated to be either flat or up slightly year over year.
Moreover, the company’s high debt levels are concerning. Evidently, debt to capitalization ratio, a measure of financial leverage, exceeded 28% at the end of fourth quarter, 2019.
Negative Estimate Revisions and Zacks Rank
Investors’ pessimism revolving around the stock is evident from the Zacks Consensus Estimate for 2020 earnings being revised downward by 13.9% in the past 60 days to $3.03.
Shares of Azul, Frontline and Costamare have moved up 3.6%, 23% and 22.9%, respectively, in a year.
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Kirby (KEX) Loses 13% in a Year: What's Dragging It Down?
Shares of Kirby Corporation (KEX - Free Report) have lost 13% against the industry's 16.1% decline in a year’s time. The disappointing performance was caused by weakness in the oil and gas market as well as ramped down activity in coal transportation business.
Let’s discuss the factors hurting the stock.
Dismal performance of the oil and gas market caused a 16% decline in the company’s distribution and services revenues in 2019. The headwind is anticipated to persist in 2020, which is likely to lower revenues at the distribution and services in the range of 12-17%.
Also, reduced activity in coal transportation business is likely to dent coastal revenues (part of the broader marine transportation segment’s revenues) in 2020. Consequently, coastal revenues are anticipated to be either flat or up slightly year over year.
Moreover, the company’s high debt levels are concerning. Evidently, debt to capitalization ratio, a measure of financial leverage, exceeded 28% at the end of fourth quarter, 2019.
Negative Estimate Revisions and Zacks Rank
Investors’ pessimism revolving around the stock is evident from the Zacks Consensus Estimate for 2020 earnings being revised downward by 13.9% in the past 60 days to $3.03.
Kirby carries a Zacks Rank #4 (Sell).
Stocks to Consider
Few better-ranked stocks in the Zacks Transportation sector are Azul S.A (AZUL - Free Report) , Frontline Ltd. (FRO - Free Report) and Costamare Inc. (CMRE - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Azul, Frontline and Costamare have moved up 3.6%, 23% and 22.9%, respectively, in a year.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
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