Earnings Update: Here's Why Analysts Just Lifted Their Kirby Corporation (NYSE:KEX) Price Target To US$57.80
Last week, you might have seen that Kirby Corporation (NYSE:KEX) released its yearly result to the market. The early response was not positive, with shares down 3.9% to US$50.76 in the past week. It was a pretty bad result overall; while revenues were in line with expectations at US$2.2b, statutory losses exploded to US$4.55 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Check out our latest analysis for Kirby
Taking into account the latest results, Kirby's four analysts currently expect revenues in 2021 to be US$2.18b, approximately in line with the last 12 months. Kirby is also expected to turn profitable, with statutory earnings of US$1.55 per share. Before this earnings report, the analysts had been forecasting revenues of US$2.22b and earnings per share (EPS) of US$1.71 in 2021. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.
Despite cutting their earnings forecasts,the analysts have lifted their price target 7.8% to US$57.80, suggesting that these impacts are not expected to weigh on the stock's value in the long term. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Kirby, with the most bullish analyst valuing it at US$63.00 and the most bearish at US$48.00 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Kirby is an easy business to forecast or the the analysts are all using similar assumptions.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Kirby's revenue growth will slow down substantially, with revenues next year expected to grow 0.3%, compared to a historical growth rate of 7.8% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.4% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Kirby.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Kirby. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Kirby's revenues are expected to perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Kirby going out to 2024, and you can see them free on our platform here..
Don't forget that there may still be risks. For instance, we've identified 3 warning signs for Kirby (1 is a bit concerning) you should be aware of.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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