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Kirby (KEX) Shares Down 18.4% in a Year: More Hurdles Ahead?

Kirby Corporation KEX shares have lost 18.4% of value in the past year against the industry’s 4.6% increase.

Let’s discuss the reasons for this drab price performance and examine what lies ahead for the company.

Low volume and poor barge utilization are exerting pressure on the marine transportation segment’s performance. Notably, revenues in the unit declined 11.5% year over year in 2020. Also, Kirby anticipates market conditions to remain weak at the marine transportation unit in the first quarter of 2021 due to increased pricing pressure on contract renewals.

Within the marine transportation unit, reduced barge utilization and low fuel rebills are weighing on inland market revenues. Kirby anticipates market conditions to remain challenging in inland marine business until the second half of the year.

Revenues and operating margin at the unit are expected to decline sequentially in the first quarter of 2021 due to lower pricing on term contract renewals and delays from seasonal winter weather.

Amid surging COVID-19 cases in the United States and the resultant disruptions on its operations, the company expects first-quarter earnings to decline sequentially.

Unfavorable Estimate Revisions

The Zacks Consensus Estimate for current-year earnings has declined 17.3% to $1.53 per share in the past 60 days.

Zacks Rank & Stocks to Consider

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

Some better-ranked stocks in the Zacks Transportation sector are Canadian Pacific Railway Ltd. CP, Kansas City Southern KSU and Herc Holdings Inc. HRI. All the stocks sport 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 Canadian Pacific, Kansas City and Herc Holdings is pegged at 9.1%, 15% and 12.6%, respectively.

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