Kirby Corporation (KEX) Hit a 52 Week High, Can the Run Continue?
Have you been paying attention to shares of Kirby (KEX)? Shares have been on the move with the stock up 6.1% over the past month. The stock hit a new 52-week high of $77.87 in the previous session. Kirby has gained 20.1% since the start of the year compared to the 14.7% move for the Zacks Transportation sector and the 2% return for the Zacks Transportation - Shipping industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on April 27, 2023, Kirby reported EPS of $0.68 versus consensus estimate of $0.65 while it beat the consensus revenue estimate by 6.49%.
For the current fiscal year, Kirby is expected to post earnings of $3.58 per share on $3.1 billion in revenues. This represents a 70.48% change in EPS on a 11.33% change in revenues. For the next fiscal year, the company is expected to earn $4.76 per share on $3.18 billion in revenues. This represents a year-over-year change of 32.96% and 2.67%, respectively.
Valuation Metrics
Kirby may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Kirby has a Value Score of C. The stock's Growth and Momentum Scores are B and C, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 21.6X current fiscal year EPS estimates, which is a premium to the peer industry average of 7X. On a trailing cash flow basis, the stock currently trades at 12.5X versus its peer group's average of 1.9X. Additionally, the stock has a PEG ratio of 1.8. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Kirby currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Kirby passes the test. Thus, it seems as though Kirby shares could have potential in the weeks and months to come.
How Does KEX Stack Up to the Competition?
Shares of KEX have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Tsakos Energy Navigation Ltd (TNP). TNP has a Zacks Rank of # 2 (Buy) and a Value Score of A, a Growth Score of B, and a Momentum Score of F.
Earnings were strong last quarter. Tsakos Energy Navigation Ltd beat our consensus estimate by 5.38%, and for the current fiscal year, TNP is expected to post earnings of $9.27 per share on revenue of $789.9 million.
Shares of Tsakos Energy Navigation Ltd have gained 0.3% over the past month, and currently trade at a forward P/E of 1.9X and a P/CF of 1.49X.
The Transportation - Shipping industry may rank in the bottom 74% of all the industries we have in our universe, but there still looks like there are some nice tailwinds for KEX and TNP, even beyond their own solid fundamental situation.
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